Japan secures mining rights and infrastructure deals as China warns against third-party influence in resource-rich Mongolia

The competition between China and Japan over rare earth resources is intensifying. The latest diplomatic battleground is Mongolia. Last month, Mongolian Foreign Minister Batmunkh Battsetseg held a closed-door meeting with Japanese Foreign Minister Toshimitsu Motegi and stated, “As a special strategic partner, we hope to further concretize cooperation with Japan.” Japan responded by expressing its willingness to actively collaborate on the expansion of Genghis Khan International Airport. In response, Chinese Foreign Minister Wang Yi rushed to Ulaanbaatar to meet with Mongolia’s president, prime minister, and foreign minister in succession.

China views the “concretization of cooperation” mentioned by the Mongolian foreign minister after his talks with Japan as a reference to rare earth supply. Mongolia is rich in rare earth resources. The U.S. Geological Survey (USGS) estimates Mongolia’s rare earth reserves at 3,100 tons, the world’s second-largest after China’s 4,400 tons.

Since the 2010 Senkaku Islands territorial dispute with Japan, China has restricted exports of heavy rare earths like dysprosium and terbium to Japan. Japan diversified its supply chain to countries like Vietnam, reducing its dependence on Chinese imports from 90% in 2010 to 63% over 15 years. During this process, Japan focused on Mongolia, which has abundant potential reserves but insufficient exploration and development.

In 2021, Mongolia opened Genghis Khan International Airport. Japan provided a low-interest long-term loan of 410 million dollars for its construction, and Japanese companies like Mitsubishi supplied the necessary technology. In July last year, Emperor Naruhito made the first state visit to Mongolia by a Japanese monarch.

In return, Japan secured the right to develop the Khalzan Buregtei mine in northwestern Mongolia. The mine has confirmed rare earth reserves of 150 tons, rich in heavy rare earths like dysprosium and terbium. Dysprosium is essential for enhancing the performance of permanent magnets.

Immediately after the Japan-Mongolia talks, China warned Mongolia, stating, “A third country should not use its territory to harm the sovereignty and security of another.” Citing a 1994 treaty, Beijing threatened that Mongolia should not undermine its exclusive influence by supplying rare earths to Japan. Mongolia’s logistics are vulnerable if China and Russia control its railway network.

Published Date:2026-07-02