China’s rail ambitions receive another boost as Mongolia approves new line www.scmp.com

Mongolia’s parliament has ratified a deal with China to jointly construct a new cross-border rail connection between the two countries, as it looks to forge closer ties with its southern neighbour amid US President Donald Trump’s tariff war.
Construction of the 19.5-kilometre (12.1-mile) railway – which will allow Mongolia to ramp up its coal exports to China – had been held up for over a decade, but the project has gained fresh momentum in recent months.
Gantumur Luvsannyam, Mongolia’s first deputy prime minister, told the Post in an interview earlier this year that the intergovernmental agreement with China was “one of the top items in the agenda”.
“Construction work will start this year and it’ll be completed in 2027,” he said, adding that coal terminals on both sides of the border would also be completed by then.
The move is the latest in a series of steps forward for China’s attempts to build a pan-regional rail network to boost ties with its neighbours.
The country is also working on a 523km railway extending to Kyrgyzstan and Uzbekistan in the west, as well as high-speed links with Vietnam and Thailand in the south.
The Mongolian project – known as the Gashuunsukhait-Gantsmod cross-border railway – had previously been delayed due to the slow development of Mongolia’s rail industry and some misunderstandings regarding the day-to-day operation of the railway, according to Luvsannyam.
But Mongolia now appears to be prioritising the new line as it looks to strengthen its economic independence by boosting coal exports.
Sumiya Chuluunbaatar, a non-resident fellow at the Mongolian Academy of Sciences’ Institute of International Studies, said that the project would lead to “increased trade” with China and “could be seen as a step towards economic stability”.
“Against the backdrop of Trump’s protectionist policies potentially disrupting global trade, the cross-border railway agreement appears to be a strategic move for Mongolia to support its economy, particularly by strengthening trade with China,” he noted.
Mongolia exported a total of 83.7 million tons of coal last year, official data showed. Once operational, the cross-border railway is projected to increase the country’s coal transport capacity by 30 million tons, allowing Mongolia to maintain an economic growth rate above 6 per cent.
“The ratification demonstrates the unanimous support across the parliament for this project,” said Prime Minister Oyun-Erdene Luvsannamsrain in an official statement.
“This partnership is unlocking valuable export and investment opportunities, opening Mongolia’s natural resources to drive new investment into the country.”
China is by far Mongolia’s largest trading partner, receiving 91.3 per cent of the country’s exports and supplying 40 per cent of its imports in 2024, according to Mongolian customs data.
BY: Kandy Wong
Kandy Wong returned to the Post in 2022 as a correspondent for the Political Economy desk, having earlier worked as a reporter on the Business desk. She focuses on China's trade relationships with the United States, the European Union and Australia, as well as the Belt & Road Initiative and currency issues. She graduated from New York University with a master's degree in journalism in 2013. An award-winning journalist, she has worked in Hong Kong, China and New York for the Hong Kong Economic Journal and the Financial Times, E&E News, Forbes, The Economist Intelligence Unit, Nikkei Asia and Coconuts Media.

Mongolian Coal Market Heats Up Amid Rising Demand and Declining Port Inventories Boosted by improved downstream demand, activity rises but prices remain constrained Source:SMM (Shanghai Metals Market)

Key Highlights
Increased Market Activity
The Mongolian coal market has seen heightened activity as demand from the domestic coking coal and coke markets in China warms up.
Improved trading atmosphere and increased transportation of coal out of ports are reducing inventory levels.
Prices Remain Constrained
Despite the market boost, coal prices remain limited due to various economic factors, indicating challenges in achieving higher margins.
Impact of Declining Port Inventories
As inventories continue to decrease, analysts anticipate further fluctuations in coal supply and demand trends.

Delegation from Nuclear Energy Agency visits Mongolia www.akipress.com

Nuclear Energy Agency Director General William D. Magwood IV visited Mongolia for a series of meetings with government representatives and to participate in discussions on nuclear energy development in the country, Nuclear Newswire.
Magwood met with Minister of Energy Battogtokh Choijilsuren to discuss the potential deployment of small modular reactors in Mongolia, as well as challenges in the nuclear energy sector related to financing, supply chain disruptions, and workforce development.
He highlighted the NEA's work on these topics and on the analysis of SMR projects around the world, as documented in the NEA SMR Dashboard—a comprehensive assessment report of the progress made by SMR developers worldwide first published in 2023 and updated periodically.
During the visit, which took place on February 20-21, meetings were held with Mongolian officials such as director general of the International Trade and Economic Affairs Department in the Ministry of Foreign Affairs Ulziisaikhan Ganbold, state secretary of the Ministry of Industry and Minerals Javkhlanbaatar Sereeter, and secretary of the Nuclear Energy Commission Manlaijav Gun-Aajav.
The discussions focused on the process of preparing for the adoption of nuclear energy technologies, including through the development of legal frameworks and regulatory requirements, expanding local workforce and education programs, and fostering public trust. Magwood emphasized the importance of international cooperation in each of those areas.
Magwood also visited the National University of Mongolia, where he engaged in discussions with students and staff and gave a lecture on the opportunities and challenges in the nuclear sector. He headlined an event titled Clean Energy Transition and SMR Workshop: Towards a Roadmap for Nuclear Energy in Mongolia, where he provided keynote remarks and moderated a panel on nuclear energy's role in the future energy mix of the country.

China deploys rare earths as weapon in trade war with Trump www.mining.com

China has expanded its use of critical minerals as a trade weapon with curbs on exports of rare earths, threatening to shake-up the global supply of key materials used widely in high-tech manufacturing from electric vehicles to weaponry.
As part of its retaliation to President Donald Trump’s so-called reciprocal tariffs on imported Chinese goods, Beijing said Friday it will tighten controls on exports of seven types of rare earths. The country is by far the world’s biggest supplier of the minerals, which comprise 17 elements in the periodic table.
The move triggered big gains for related stocks on Monday, with China Rare Earth Holdings Ltd. rising as much as 10% in Hong Kong. China Northern Rare Earth Group added as much as 9.2%, and Australia’s Lynas Rare Earths Ltd. as much as 5.1%.
China accounts for almost 70% of the world’s production of rare earths, according to the US Geological Survey. Its grip on a host of niche commodities has long been viewed as a potential geopolitical weapon, given America’s reliance on Chinese supplies.
Beijing had already rolled out similar curbs on other critical minerals, such as gallium, germanium, graphite and antimony, over the past two years amid rising trade tensions.
The latest export controls aren’t a blanket ban, but they mean that any overseas shipments will be subject to greater scrutiny over who is buying, and why. Other metals have seen export volumes crash to zero after controls were rolled out, with exporters needing time to get certified.
“The new controls may further tighten global supply,” analysts from Citic Securities Ltd. said in a note. The policy “safeguards China’s national security interests, and bolsters the strategic value of investing in the rare earth industry chain,” they wrote.
Supply chain
The list of rare earths announced Friday includes samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium. But two of the most common — neodymium and praseodymium — weren’t included. They’re used in powerful magnets that are one of the best-known applications for rare earths.
“Unlike the seven rare earths selected, these are more readily available outside China, which could make any controls less impactful,” said David Abraham, affiliate professor at Boise State University in Idaho. “They may have been excluded to preserve the option of future controls.”
The export restrictions won’t harm the stability of the international supply chain, according to a statement from the China Nonferrous Metals Industry Association on Sunday.
“As long as companies do not engage in activities that harm China’s national sovereignty, security and development interests, the export control measures won’t affect their normal operation and trade,” the industry body said.
On Friday, China’s commerce ministry said establishing the controls on so-called dual-use items that have military applications is in the interests of national security, regional stability and world peace.

Transporters Submit Formal Request to Change Road Load Control Standards of Mongolia www.montsame.mn

Ulaanbaatar Begins Installing Cable Car Pillars www.montsame.mn

Within the Tuul River basin area, six support pillars are currently under installation as part of the Ulaanbaatar Cable Car Project.
This Project is one of Ulaanbaatar's 24 mega projects. The first line of the cable car is now under construction, with six of its 19 support pillars being built in the Tuul River floodplain area ahead of the spring runoff and seasonal flooding.
The second line of the Project will stretch 2.7 kilometers from Shangri-La to the National Garden Park, featuring three stations and 70 to 74 cabins. The cable car project is expected to alleviate peak-hour traffic congestion, mitigate bottlenecks in the Yaarmag and Nisekh areas, and increase the average speed of city traffic by 4 percent.
Each cabin will accommodate up to 10 passengers, with a travel time of approximately 11 minutes. The support pillars will range in height from 7.5 to 42 meters, and the cable cars will operate at a speed of 21 kilometers per hour.

Procedure for Granting Tax Incentives to IT Companies Ready for Submission to the Government www.montsame.mn

Following the proposals from the members of the National Council of Mongolia, aimed at submitting the Law on Supporting the Information Technology Industry and formulating the IT sector's policy and directions, procedures on regulating the operation of the virtual zone, as well as provisions for tax and non-tax incentives for the IT sector have been finalized and ready to be submitted to the Government of Mongolia.
The National Council is chaired by Prime Minister of Mongolia Oyun-Erdene Luvsannamsrai, with Minister of Digital Development and Communications of Mongolia Baatarkhuu Tsend serving as Deputy Chair, and Director of the National Information Technology Park Zolzaya Jargalsaikhan acting as Secretary. The National Council also includes representatives from the private sector and universities. 
These procedures and incentives are expected to boost the growth of Mongolia's information technology sector, driving innovation and advancement of high technology. Accordingly, the Government of Mongolia is pursuing a policy aimed at supporting IT companies through tax and non-tax incentives. 
The National Council has so far developed key documents, including the National Strategy for Developing the Information Technology Industry and Advanced Technologies, the operational procedure for the virtual zone, and procedures for providing tax and non-tax support.

Mongolia to Export Certain Goods Tariff-Free to Eurasian Economic Union Countries www.montsame.mn

Mongolia and the Eurasian Economic Union have held the third round of negotiations on the "Concluding the Interim Free Trade" Agreement and agreed on products to be supplied tariff-free or with reduced tariffs.
A total of 367 types of goods will be exported tariff-free from Mongolia to the countries of the Eurasian Economic Union (Russia, Kazakhstan, Belarus, Armenia, Kyrgyzstan). Specifically, 29 types of meat and meat products, 60 types of leather products, 204 types of wool and cashmere products, and 73 types of other agricultural products will be duty-free. This will allow exporting entities of Mongolia to be exempted from customs duties of USD 16.6 million per year. 
First Deputy Prime Minister and Minister of Economy and Development of Mongolia Gantumur Luvsannyam noted, "The Government can increase meat exports in cooperation with the Eurasian Economic Union and earn USD 500 million.
Our country exports meat to these countries to a certain extent, but we currently do not export sheep and goat meat. These issues can be resolved through negotiations, enabling the export of meat throughout all four seasons of the year. It is also possible to establish cashmere and knitted goods brands and export them to the Eurasian market to earn at least USD 500 million."
The Policy Research Laboratory of the National University of Mongolia studied the economic impact of Mongolia joining the Eurasian Economic Union free trade agreement. An analysis of Mongolia's foreign trade situation showed that 375 types of goods account for a very small share of total exports and may decrease from year to year. The imports from the EAEU countries can be greater than domestic production and exports, according to the study.
N. Otgonsaikhan, Professor of the Department of Marketing and Trade of the National University of Mongolia, noted, "Mongolia exported goods worth USD 110.1 million to the EAEU countries last year and imported goods worth USD 2.9 billion. With the negotiations, exports are predicted to increase by 3.8 percent and imports by 4.7 percent. This shows how much the trade balance deficit will be. Most of the increase in imports is in the industrial sector. This sector, which is aimed at restoring through the implementation of state policies and programs, will be negatively affected by the growth. Therefore, if the agreement is concluded, it is important to make the industrial sector competitive. There is an opportunity to export certain products in the textile and knitting sector. Revenue from it is possibly increased by USD 200-300 thousand. In the agreement with Japan, there was a case in which our carpets did not meet the rules of origin requirements. Based on previous experience and solving the issues, we can increase exports. Within the framework of the negotiations, customs duties on key goods were eliminated. However, if we do not meet the rules of origin and other requirements, preferential tariffs are useless. Therefore, I would like to say to manufacturers, be very well prepared."

Ch.Lodoisambuu: A bill will be submitted to exempt employers from VAT paid on behalf of employees www.gogo.mn

Ch.Lodoisambuu, Member of the Parliament, announced that he is working with B.Tuvshin, the Member of Parliament, to amend the Law on Social Insurance. The proposed changes include:
Stopping the collection of VAT on one-time work payments made under a separate employment contract with an organization.
Exempting employers from VAT paid on behalf of employees. Although contributions are made in the name of employees, they do not affect pensions.
Stopping VAT charges on discounts and incentives provided by employers to employees outside their salaries.
The bill is expected to:
Reduce the financial burden on individuals and businesses, encouraging economic activity.
Allow employers to allocate more funds to salary increases and job creation by lowering VAT obligations.
Prevent VAT related cost increases from being passed on to consumers, helping to stabilize prices.

Mongolia–European Union Joint Committee Holds Its 23rd Meeting www.montsame.mn

The 23rd Meeting of the Mongolia–European Union Joint Committee was held in Ulaanbaatar, the capital city of Mongolia, on April 4, 2025.
At the Meeting, the two parties exchanged updates on the latest political, social, and economic developments and discussed ways to further expand Mongolia–European Union relations and cooperation under the shared long-term development goals. In particular, the two sides discussed strengthening collaboration in renewable energy and green transition, as well as increasing trade turnover by elevating the EU’s Generalized Scheme of Preferences.
The two sides also exchanged views on combining efforts to contribute to addressing climate change, with a shared commitment to effectively implementing the measures outlined in the roadmap for the “Forest Partnership” Memorandum of Understanding. The Meeting also reviewed the outcomes of the latest sessions of the Human Rights Dialogue and the Development Cooperation Working Group held under the Joint Committee. A joint press release was issued following the 23rd Meeting of the Mongolia–EU Joint Committee.
Munkhtushig Lkhanaajav, State Secretary of the Ministry of Foreign Affairs of Mongolia, and Paola Pampaloni, Deputy Managing Director for Asia and the Pacific at the European External Action Service, co-chaired the 23rd Meeting.