Base Tariff for the Transportation of Petroleum Products by Rail to Be Halved www.montsame.mn

The Ministry of Road and Transportation of Mongolia issued a regulation to reduce the base tariff for the transportation of petroleum products on the "Sukhbaatar-Zuunbayan-Tsogttsetsii-Tavantolgoi" by 50 percent.
Director of the Railway and Maritime Transport Policy of the Ministry of Road and Transportation of Mongolia Kh. Itgelt said, "The regulation has been notified to the "Ulaanbaatar Railway," "Mongolian Railway," and "Tavantolgoi Railway" companies. The reduced tariff will come into effect soon. So, we urge fuel importers and transport companies to adhere to weight standards of freight, ensuring the safety public and local railroads."
Moreover, the Ministry of Road and Transportation plans to establish hazardous cargo storage tanks and load-unload areas in connection with the establishment of fuel reserves in the Gobi region. In this context, discussions are underway with aimag and local Governors to provide support to business entities and organizations and resolve land issues within the framework of laws and regulations.

Fire breaks out in generator at TPP-3 www.gogo.mn

On June 2, 2025, a fire broke out at Thermal Power Plant No. 3 (TPP-3), located in the 3rd khoroo of Khan-Uul District. The emergency services received the call at 00:25.
Multiple emergency response teams were dispatched to the scene, including units from the National Emergency Management Agency (NEMA), the Capital Emergency Department, the Capital Rescue Unit, as well as emergency units from Khan-Uul, Chingeltei, Bayangol, Songinokhairkhan, and Bayanzurkh districts. The Information and Rapid Control Center also participated in the coordinated response.
The fire occurred in Turbine No. 9 of the high-pressure workshop, which spans an area of 50x230 meters. The generator involved is a critical component of the power plant, responsible for converting thermal energy into electrical energy. Emergency teams successfully extinguished the fire, which had affected the generator, east wall, and roof of the turbine section.

Mongolia PM Faces Likely Confidence Vote Amid Corruption Claims www.afp.com

Mongolia's parliament is expected to vote Monday on whether to keep its fracturing coalition government in office, following protests against the country's embattled prime minister over alleged corruption.
The landlocked democracy in northern Asia has struggled with corruption for decades, and many in the country say a wealthy elite is hoarding the profits of a years-long coal mining boom at the expense of the general population.
Those tensions resurfaced last month after reports of allegedly lavish spending by the son of Prime Minister Luvsannamsrain Oyun-Erdene sparked days of protests in the capital Ulaanbaatar.
Oyun-Erdene is due to address the State Great Khural -- the Mongolian parliament -- on Monday ahead of a "confidence vote" to decide whether the government he heads should continue, according to the prime minister's office.
It would mark the first time a Mongolian prime minister has submitted a confidence motion in their own government and raises the spectre of Oyun-Erdene's resignation if he loses.
Mongolia has been ruled by a three-way coalition government since elections last year resulted in a significantly reduced majority for Oyun-Erdene's Mongolian People's Party (MPP).
But the MPP evicted the second-largest group, the Democratic Party (DP), from the coalition agreement last month after some younger DP lawmakers backed calls for Oyun-Erdene's resignation.
The move pushed the country's fractious political scene into further uncertainty.
Since Oyun-Erdene took power in 2021, Mongolia has plummeted in Transparency International's Corruption Perceptions Index.
The country has seen frequent unrest, and hundreds of young people protested in Ulaanbaatar last month calling for him to step down.
The allegations against Oyun-Erdene's family have hit a nerve at a time when many in the country are worried about their economic prospects and rising living costs.
The prime minister's office has denied allegations of impropriety -- describing them as a "smear" -- and warned of economic chaos if his government collapses.
Some counter-protesters -- overwhelmingly older than their pro-opposition counterparts -- also turned out to support the prime minister last month.

Rio Tinto finds its mega-mine stuck between two Mongolian strongmen www.afr.com

Inside Mongolia’s cavernous parliament, politicians huddle in clusters, rushing between benches and locked-door meetings. A historic confidence vote looms over Prime Minister Oyun-Erdene Luvsannamsrai, whose grip on power is slipping amid corruption allegations and a populist backlash – sending tremors through the country’s most important foreign investment: the vast Oyu Tolgoi copper mine run by Rio Tinto.
The ASX-listed giant has already weathered two decades of turbulence in Mongolia. But the current political crisis – compounded by allegations levelled at the company and a fractured government – threatens to derail its most ambitious expansion, a multibillion-dollar underground mine that would make Oyu Tolgoi one of the world’s five biggest copper producers.
In a former socialist country that has transitioned more successfully to democracy than many others, Rio looms as both a lightning rod for government ire and, as the powerhouse of its economy, the first example politicians point to as a successful model for Mongolia’s future growth.
Street vendors in Mongolia. The country is dependent on resources revenues, making Rio Tinto a central player in the drama unfolding in the government. Bloomberg
A secret lawsuit filed by Mongolian authorities against Rio in Britain’s High Court is a case in point. The Australian Financial Review revealed last week that the company had been accused of involvement in a bribery scheme targeting at least two Mongolian politicians between 2008 and 2012.
Rio strongly denies the allegations, which remain sealed, and come at the same time as the company is in a dispute over $647 million in taxes. “Rio’s poor planning and flawed execution caused financial harm to Mongolia,” reads a passage from the Mongolian government’s confidential court filing, which alleges losses between $2 billion and $27 billion.
At the same time as those lawsuits, government members close to Oyun-Erdene insist that there needs to be stability so that companies like Rio aren’t scared away. They argue that it is only through deals like the one for Oyu Tolgoi – Mongolia owns 34 per cent of the project – that the country will be able to unlock its enormous reserves of natural resources.
“It was difficult to deal with Mongolia because leadership changed so frequently. You’d meet someone, then meet someone completely different the next time,” said Odbayar Erdenebileg, a government minister and the chairman of the national committee for monitoring and evaluation.
“But with this coalition, we’ve seen consistency. For example, the border railway issue involved more than 50 meetings over the years, but this time, a unified team quickly signed a memorandum and launched construction.
“Now, that progress is under threat. I believe foreign partners are in a state of shock. If the most inclusive and promising government structure in recent history collapses, it will seriously damage investor confidence.”
The threat Odbayar is talking about is Mongolian President Ukhnaagiin Khürelsükh, whom the government blames for fomenting unrest against Oyun-Erdene, in a bid to stay in power and manoeuvre around term limits which would otherwise mean he would have to leave office. Khürelsükh, a former prime minister, is close to Russia’s Vladimir Putin. Earlier this month, he attended a military parade in Moscow’s Red Square.
Oyun-Erdene is expected to allow a vote of no confidence in his government this week amid a scandal involving his family’s lavish lifestyle. The fiancée of Oyun-Erdene’s 23-year-old son Temuuleni, for instance, has posted pictures of her luxury bags, expensive rings and a Mercedes-Benz, prompting protest in a country where average monthly salaries are little over $1000.
Foreign investors are rattled. Mongolia’s democratic system, established in 1990 after the collapse of the Soviet Union, has withstood three decades of economic and political change, but its institutions remain young.
“It looks like corruption has been increasing, but actually it is just being disclosed more, which shows the democracy is working,” said Jargalsaikhan Dambadarjaa, an economist at the Defacto Institute, an Ulaanbaatar-based think tank. “People in Mongolia know we have these very rich deposits, but the economy is not competitive right now and inflation is high. The people need to see foreign investment translating into their lives.”
Rio arrived in Mongolia in 2006, when it bought 9.95 per cent of Oyu Tolgoi’s previous owner, Ivanhoe Mines. Over time it increased its stake and by 2012 it was the majority owner of the company, eventually renamed Turquoise Hill. It acquired the remainder of Turquoise Hill in 2022.
Oyu Tolgoi is expected to be one of the world’s top five copper producers later this decade, thanks to a seven-year underground expansion project that was completed in 2023 at a cost of $US7.06 billion ($11.11 billion). Ultimately, construction of the underground mine took almost two years longer than expected and cost almost $US1.7 billion more than planned.
The delays and cost blowouts have made Rio an easy target for parliamentarians and pundits in Mongolia, especially when criticism arises of how the government is managing the economy.
Part of the High Court lawsuit revealed by the Financial Review last week is a request for compensation. And the animosity appears to be both ways. The High Court filing also revealed that the Rio subsidiary that owns and operates Oyu Tolgoi demanded the Mongolian government repay $US371.9 million ($580 million) of excess taxes that it claims were wrongly collected by the government, the equivalent of 1.8 per cent of Mongolia’s GDP.
Rio argues that the complexity of the mine, and the size of the resource, requires it to be flexible about the development. Sometimes, that means higher costs and a different timeline to earlier plans.
“Oyu Tolgoi is one of the largest known copper deposits in the world,” said Munkhsukh Sukhbaatar, the managing director of strategy and growth at Rio’s copper division and the former director of Mongolia for the mining company.
“We are continuing to learn things about this deposit, so sometimes plans need to change, which is standard practice for a mining project of this scale and complexity. Rather than just constructing a building, this project is like a mission to Mars. We adjust as we learn more.”
Rio’s position is particularly precarious. The company needs government approval to expand into nearby tenements that would sustain Oyu Tolgoi’s peak output levels. The company has told investors it will reach those levels this year with a 50 per cent increase in production. But the mining licence for the nearby tenements is held by Canada’s Entrée Resources. Rio is waiting for the Mongolian government to approve the licence transfer.
Any freeze in government approvals or parliamentary paralysis could delay those plans by months – and cost hundreds of millions of dollars.
“Both sides are now working to find solutions within international legal frameworks,” said Odbayar, the government minister. “We must protect investor rights without compromising Mongolia’s national interest or the well-being of our people. Discussions are ongoing.”
Before the latest lawsuit, Rio chief executive Jakob Stausholm and the Mongolian government had attempted a public reset of their relationship. The company even waived $2.4 billion in loans owed by the government. Now, not only is Oyun-Erdene’s position in doubt, but Stausholm is leaving Rio, pushed out by the board after four years in the job. The board, it seems, wants someone with more technical experience who will cut costs.
In Mongolia, perhaps Rio’s best hope is the pressure Oyun-Erdene is under. To prop up his stalling government, those close to Oyun-Erdene point to his pro-business economic agenda, which is centred on a long-term development plan that has 14 megaprojects. Officials say it is vital to break Mongolia’s dependency on raw commodity exports and maintain a strong relationship with international money markets.
Five of those projects are moving ahead. These include a new railway link between Mongolia and China – its first in over 70 years – designed to slash freight times. Announced earlier this month, the project gives Mongolia a transport edge over regional rivals like Australia and Indonesia, which face longer shipping routes to Chinese ports. It is unclear who will fund the railway. A long-stalled uranium mining venture with French developers is also under way, as is the construction of a major hydroelectric power station that aims to reduce Mongolia’s dependence on energy imports.
Two other projects are nearing approval: another large-scale hydroelectric station and a long-awaited copper refinery. Officials close to the government’s economic team argue that all these projects have advanced faster than they would have under previous administrations.
“If [Oyun-Erdene] loses, the political chaos and instability will be a problem,” said one government minister who asked for anonymity. “We need to signal to the world that we are stable.”
“This is not the environment for making billion-dollar investment decisions,” said another.

Secretary Rubio’s Call with Mongolian Foreign Minister Battsetseg, May 30, 2025 www.mn.usembassy.gov

Readout Office of the Spokesperson
The below is attributable to Spokesperson Tammy Bruce:
Secretary of State Marco Rubio spoke today with Mongolian Foreign Minister Batmunkh Battsetseg.  The two discussed expanded economic cooperation opportunities between the United States and Mongolia.  Secretary Rubio underscored support for Mongolia’s democratic values and independent foreign policy.

Regular Train Rides on the Ulaanbaatar-Beijing Railway Route to Be Resumed www.montsame.mn

The "Ulaanbaatar Railway" JVC will resume train trips on the Ulaanbaatar-Beijing railway route numbered 24/23 after five years of suspension due to the COVID-19 pandemic, starting from June 3, 2025.
The first train will depart from Beijing, the Capital City of the People's Republic of China, on June 3, 2025, and arrive in Ulaanbaatar, the Capital City of Mongolia, on June 4, 2025. The regular schedule of the Ulaanbaatar-Beijing route has been established, departing from Beijing at 07:27 on Tuesdays and arriving in Ulaanbaatar at 14:35 on Wednesdays. The return trip will depart from Ulaanbaatar at 07:18 on Thursdays and arrive in Beijing at 14:35 on Fridays.

Mongolian Dance Teams Win Three Gold Medals at the World Championship Choreography Latin 2025 www.montsame.mn

Member of the Mongolian Dance Sport Federation "Royal Dance" team and the "Star Girls" team of the "Star Dance Club" of Mongolia won a total of three gold medals and two trophies at the World Dance Sport Federation (WDSF) World Championship Choreography Latin 2025 held in Braga, Portugal, from May 31 to June 1, 2025.
In the Championship, the Mongolian team “Royal Dance” competed in the youth and adult categories, earning two golden medals and two championship cups, while "Star Girls" competed in the youth category and won first place, winning the gold medal. The best teams from 18 countries danced off at the Championships in the junior, adult, and youth categories.
The "Royal Dance" team, consisting of 20 members and three teachers, was founded in 2019.

Russia Starts Buying Potatoes From Mongolia www.charter97.org

Faced with a shortage and a sharp rise in potato prices, Russia for the first time resorted to buying "second bread" in Mongolia. In April-May, more than 4 thousand tons of potatoes were imported to Buryatia from the neighboring country, according to the "Baikal-Daily". Director of the local branch of Rosselkhozcenter Namzhil Mardvaev noted that the news left a "depressing impression," since potatoes have been grown in Buryatia for more than 300 years, while in Mongolia they began to do so only in the 1960s, and most productively in the 2000s. "Mongolians have been transporting all the potatoes from us for centuries," Mardvaev stressed.
But now, he said, potato cultivation in the neighboring country is at a different level compared to Russia. At the same time, in addition to new modern equipment, Mongolia uses a lot of old Soviet machines, which were exported including from Buryatia at the price of scrap metal. "And these guys, who started growing potatoes yesterday, are now selling them to us. Indeed, God works in mysterious ways," concluded the director of the local Rosselkhozcenter.

Mongolia bans online gambling, betting and paid lotteries www.qazinform.com

How Dismantling the US Millennium Challenge Corporation Will Undermine Mongolia www.thediplomat.com

Shutting down development agencies such as the MCC will force Mongolia to rely more on Russia and China for funding.
While the United States has previously served as Mongolia’s “north star” guiding the country symbolically toward democracy, the future of U.S. support remains uncertain. The dismantlement of U.S. development agencies undermines Mongolia’s ability to strive for good governance, build durable infrastructure for Mongolians, and align itself with democratic partners. 
In the past seven years, U.S. assistance to Mongolia has remained fairly consistent, with approximately $13.25 million requested in the fiscal year 2025 foreign operations budget. One of the largest current direct U.S. investments into Mongolia is the five-year, $350 million Millennium Challenge Corporation (MCC) compact to provide clean, sustainable water infrastructure for Ulaanbaatar. But this too is on the verge of being cut in the midst of the Trump administration’s dismemberment of U.S. development aid. 
The MCC is an independent government agency established in 2004 under the Bush administration. The MCC provided targeted investments in developing countries through five-year “compacts” intended to promote economic growth, reduce poverty, and strengthen government institutions. Its model is based on local oversight and implementation, and all compacts are implemented with a team of local employees with just a few U.S.-based staff. The MCC has provided more than $17 billion in grants, and is one of the best-regarded U.S. development agencies in terms of its transparent finances and long-term effectiveness.  
The Mongolia Water Compact with the MCC was signed in 2018 and entered into force in March 2021. In addition to the $350 million grant provided by the U.S. government, the government of Mongolia promised to contribute up to $111.8 million to support the investment, one of the largest partner country contributions in the MCC’s history. All told, then, the project would invest a total of $461.8 million into Ulaanbaatar’s water supply. This is a critical, necessary investment in Mongolia’s infrastructure given that the capital city has nearly tripled in size in less than three decades and demand for water will likely exceed supply. 
The MCC compact intended to increase Ulaanbaatar’s water supply by 80 percent through three key investment activities: constructing new groundwater wells with an advanced water purification plant; wastewater recycling to increase the quantity of freshwater available for household consumption; and a focus on water sector sustainability via policy reforms, capacity building, and technical assistance. All of these steps will ultimately improve access to and the quality of Ulaanbaatar’s long-term water supply – if the contract is upheld. 
While there were initial concerns that the MCC would be dismantled alongside the U.S. Agency for International Development (USAID) in late January, it was originally allowed to continue its work, albeit under tense circumstances amid sharp cuts demanded by the Department of Government Efficiency (DOGE, which despite its name is not an official government department). During a meeting on April 19, however, MCC staff were told by DOGE staff members that all of the agency’s programs would be immediately terminated and staff numbers minimized. 
Amid the rapid closures, several programs were given extensions to wrap up in-country programming. The Mongolia Water Compact was allowed three months to end programming. However, this means that the compact would end in July 2025, well short of its intended end date in March 2026. According to the MCC’s website, nearly $215 million of the $350 million grant has already been spent.
Mongolian government officials at the Embassy of Mongolia in the United States said that “if the project is not completed by the U.S., the Mongolian government will not have enough funds to complete the project on their own and will need to seek out other partners.” 
Given the limitations and pressures on many donor governments – including Japan, South Korea, and the European Union – to cut back on development funding, the Mongolian officials implied that they would feel pressured to reach out to China or Russia for additional financial assistance to complete the project. 
Mongolia’s history with the MCC has not always been smooth. The first MCC compact, a five-year $285 million investment, was a mixed affair. It was signed between the U.S. and Mongolia in 2007, with a stated focus on reducing poverty and promoting sustainable growth through four projects. The largest of these projects was intended to be a $188 million rail project to upgrade Mongolia’s only north-south railway. 
However, according to Dr. Alicia Campi in her book “Mongolia’s Foreign Policy,” a lack of coordination with Russian officials on the board of the Ulaanbaatar Railway resulted in the veto of the rail project two years after the compact had been signed, leaving MCC staff scrambling to reorganize the contents of the compact. While the compact was ultimately completed within its five-year framework in 2013, with estimated benefits to over 2 million Mongolians over the course of 20 years (according to its Closed Compact Report), the intended impacts of advancing Mongolia-U.S. business ties and investments did not transpire in the way envisioned by the compact. 
Mongolia is already struggling to uphold its governance standards amid a series of public protests against ongoing corruption by government leadership, as covered by The Diplomat. According to an MCC employee covering the Water Compact, “Mongolia has not successfully passed the MCC’s corruption indicator for the past three years on the project.” Despite these governance failures, the MCC was committed to finalizing the project and Mongolia maintained an overall passing scorecard, allowing it to continue work on the compact. 
While the general Mongolian public is not familiar with the Millennium Challenge Corporation or its work, projects like the Water Compact have an indelible impact on the quality of life for Mongolians. By investing in the future of Ulaanbaatar, the city at the heart of Mongolia will increase its potential to expand and grow, creating greater opportunities for the entire country. Shutting down development agencies such as the MCC will instead undermine Mongolian relations with the U.S. as a whole, driving Mongolia closer to Russia and China if further “third neighbor” support fails to materialize. We’ve seen this in the case of Nepal, which also had a much-needed MCC compact scrapped amid the DOGE cuts.
However, Mongolian Embassy officials were surprisingly hopeful about the future of the Mongolia Water Compact, noting that they “were in talks with counterparts” at the U.S. Department of State to complete the compact, although U.S. Secretary of State Marco Rubio “has the last word.” 
In his own words during a recent Senate Appropriations Committee hearing on the fiscal year 26 Department of State budget request, Rubio testified that the Millennium Challenge grant is “outside my direct control of purview…and there will be efforts at reform…and potentially even expansion in one of them, although that won’t be my decision solely.” 
There are some reassuring developments. As of this writing, the MCC website continues to be functional with all content present, unlike USAID’s website, and a procurement notice for a reclaimed wastewater consultant for MCC’s Mongolia Water Compact was released on May 16 – although that too could be terminated at any moment. Given the intense back and forth on development aid under the Trump administration, any agency working in this space is at risk, and Mongolia is certainly not the only country to be cut off from promised U.S. investments.
By Monica Weller