Mongolia Weekly: Mongolia advances Russia–China gas talks, probes ETT, fast-tracks tax overhaul

December 20, 2025 to December 26, 2025

This week's top 10 stories from Mongolia, selected from our daily intelligence briefs.

1. Ulaanbaatar Hosts Talks on Russia–China Gas Pipeline; Mongolia Seeks Tripartite Working Group and Clearer Project Economics

Mongolia’s First Deputy Prime Minister and Economy and Development Minister J. Enkhbayar, joined by Deputy Prime Minister Kh. Ganhuyag, held talks in Ulaanbaatar with Gazprom Deputy Board Chairman V.A. Markelov as part of the 27th Mongolia–Russia Intergovernmental Commission to advance a proposed Russia–China natural gas pipeline that would transit Mongolia. Enkhbayar pressed for quantifiable national benefits — fiscal terms, ROI, local participation — and proposed a Russia–Mongolia–China joint working group to co‑calculate project economics and jointly draft intergovernmental agreements. Russia offered prospective tax exemptions, principles for an intergovernmental deal, options for Mongolian partner involvement, and potential supply of Gazprom‑processed gas for domestic use.

Both sides agreed to institutionalize information exchange, proceed in stages toward a common position, and intensify cooperation across energy, logistics, finance and environment; no timeline, route, financing structure or regulatory milestones were disclosed. The commission signed a protocol to deepen cooperation, with Mongolia seeking stable winter fuel supplies, collaboration on the Egiin Gol hydropower project and resumption of direct Ulaanbaatar–Moscow flights; the next (28th) session will be held in Moscow. The talks signal sustained high‑level engagement but underline that key commercial and fiscal terms must be resolved before the pipeline can deliver concrete economic or energy‑security benefits for Mongolia.

Local Coverage: urug.mn, gogo.mn, unuudur.mn, montsame.mn, eagle.mn, ikon.mn, news.mn

From daily briefs: 2025-12-20, 2025-12-21

2. Fresh Allegations Revive Corruption Concerns at Erdenes Tavan Tolgoi

A Mongolian daily has alleged fresh corruption risks at state-owned coal producer Erdenes Tavan Tolgoi (ETT), reporting that political patrons have placed loyalists into senior roles and that some staff manipulated auction data to benefit favored firms. The article links a former senior procurement/audit official to ex–parliament deputy speaker T. Ayursaikhan—both previously convicted for illicit enrichment—and says an aide to MP Ts. Tuvaan was appointed to an ETT leadership post and is now under investigation by Mongolia’s Anti‑Corruption Agency for suspected license trading; authorities have said it is too early to disclose probe outcomes. Other specific allegations include intermediated sales to Chinese buyers, use of “audit” checks as leverage, and undervaluation from not washing coal or pursuing direct Baotou contracts.

If substantiated, the claims point to persistent governance gaps at ETT despite prior reforms, raising compliance, reputational and counterparty risk for international coal buyers, financiers and logistics partners operating in Mongolia. Professionals should note the involvement of named political figures and prior convictions, the ongoing ACA probe, and operational practices (auction data manipulation, intermediated sales, and quality undervaluation) that could affect contract certainty, pricing and due diligence requirements.

Local Coverage: unuudur.mn

From daily brief: 2025-12-26

3. Tax Overhaul Sent to Parliament as PM Orders End to Automatic Freezing of Business Accounts

Mongolia’s Cabinet has approved a tax reform package to be sent to Parliament, with Prime Minister G. Zandanshatar presenting the measures as aimed at bolstering import‑substituting manufacturing and the non‑mining economy. As part of a broader policy pivot, Zandanshatar ordered tax authorities to stop automatically freezing the bank accounts of businesses with tax arrears and to shift from punitive enforcement to advisory assistance, arguing that “why close 20–30 thousand small taxpayers’ accounts when most arrears sit with about a hundred large taxpayers?” (eagle.mn).

The change is intended to ease cash‑flow pressures on SMEs and prioritize recovery efforts against major delinquent taxpayers, while strengthening due‑process standards in tax enforcement. If enacted by Parliament, the package could reorient incentives toward economic diversification away from mining and reduce compliance burdens on smaller firms, but its effectiveness will depend on implementation details and how authorities target the largest debtors.

Local Coverage: ikon.mn, eagle.mn, gogo.mn

From daily brief: 2025-12-25

4. Cross-Border Gashuunsukhait–Gantsmod Railway Advances; Capacity Projections Signal Multi-Billion-Dollar Export Gains

Construction of the Gashuunsukhait–Gantsmod cross‑border railway linking Mongolia’s Tavantolgoi–Gashuunsukhait line with China’s Gantsmod–Wanshuichuan network is progressing on both sides, with China completing preparatory works, producing 85 of 94 bridge girders and installing girder‑laying equipment at the terminus. In Mongolia’s restricted zone, Package‑1 (track super/substructure) and Package‑2 (long bridge) works continue: temporary road works are 51.7% complete and 620 of 2,382 bridge piles (24.85%) have been cast. The 28.8 km project comprises a 19.4 km main line and 9.4 km of bridges, dual‑gauge (1,520 mm and 1,435 mm) and is designed for throughput of 20 mtpa on broad gauge and 10 mtpa on standard gauge.

Backers project substantial economic impact once operational: rail‑enabled exports could add ~USD 4 billion annually, increase coal shipments by 20 mtpa from 2030, and support higher GDP growth while relieving road border bottlenecks and inflationary pressures. The timeline implicit in the 2030 throughput target makes the line a strategic medium‑term enabler for Mongolia’s export capacity and Sino‑Mongolian trade logistics.

Local Coverage: isee.mn, isee.mn

From daily brief: 2025-12-20

5. Parliament Advances Plan to Float and Restructure 33 State Firms, Presses for Market-Ready Reforms

Parliament has begun debating a government roadmap to privatize and list stakes in 33 state-owned enterprises (SOEs) between 2026 and 2028, proposing to sell 10–66% stakes in 18 firms via the stock exchange, fully divest eight entities, and restructure or consolidate seven more—reducing the SOE universe from 101 to 82. The portfolio named in parliamentary discussion includes MIAT (aviation), the State Bank, mining giants Erdenes Tavan Tolgoi and Erdenet, Thermal Power Plant No.4 and TPP‑3, Mongolian Telecom, the Mongolian Stock Exchange and the Agricultural Exchange; SOE assets currently equal roughly 74% of GDP and generate about 32.5% of GDP in revenue. The concept motion passed with 54.8% support and now moves to the Economic Standing Committee.

Ministers argue listings will boost efficiency, governance and fiscal proceeds, and broaden investor access; critics — including opposition MPs, unions and some committee members — warned the market, regulatory and tariff frameworks are not ready, demanded investor‑grade disclosures, strategic investor criteria (notably for MIAT), labor protections and safeguards for strategic infrastructure, and raised governance and political‑risk concerns (allegations of patronage and potential insider control). Key open questions for the roadmap are revenue targets, the scale of public floats, legislative fixes to allow meaningful shareholdings, and sequencing of energy price liberalization before power sector privatizations.

Local Coverage: urug.mn, ikon.mn, gogo.mn, isee.mn, unuudur.mn, itoim.mn, eagle.mn, news.mn

From daily briefs: 2025-12-20, 2025-12-24, 2025-12-25, 2025-12-26

6. Parliament Orders Overhaul of State Inspections System to Streamline Services and Cut Business Burdens

Mongolia’s Parliament has adopted a resolution directing the Government to comprehensively modernize the state inspection and public service system by January 1, 2026, aiming to improve safety, cut bureaucratic duplication, and digitize approvals. The measure mandates a shift toward advisory and preventive oversight, risk‑based inspections, consolidation of overlapping sectoral controls, optimization of civil servant roles, and integration of big‑data approaches into policymaking and service delivery; parliamentary standing committees will supervise implementation.

For international investors and businesses, the reforms promise reduced compliance friction and faster licensing through e‑government and digitized processes, while regulators will face tighter coordination and an obligation to eliminate duplicative inspections that currently burden enterprises. The resolution’s explicit deadlines and supervisory framework signal a clear policy push to enhance efficiency and transparency across regulated sectors.

Local Coverage: urug.mn

From daily brief: 2025-12-21

7. Government submits sweeping tax reform package to Parliament, proposing VAT rebates and lower corporate rates

The Cabinet has submitted a broad tax-reform package to Parliament designed to shift growth toward households and ease compliance, with the Mongolian People’s Party (MPP) caucus signaling support after nationwide consultations in 2025 that collected 176,000 submissions from 13,000 participants. Key measures include tiered monthly VAT rebates to consumers (100% on purchases up to MNT 500,000; 50% up to MNT 1,000,000; 20% beyond), a personal income tax (PIT) rebate equal to the minimum wage (capped at MNT 500,000), and a reworked corporate income tax (CIT) schedule raising the 25% bracket threshold from MNT 6 billion to MNT 10 billion while taxing MNT 6–10 billion profits at 15%.

The package also targets SMEs and cash-flow constraints: the 1% turnover-tax threshold would rise to MNT 2.5 billion for three years; entities with sales under MNT 400 million may file VAT quarterly; input deductibility would expand (training, certain allowances, foreign service costs); manufacturers would receive full input VAT crediting; and customs VAT deferral of up to three months is proposed. Administrative changes include a move toward advisory tax and customs services, installment plans on arrears and an 80% cap on bank-account freezes. The government estimates a phased reduction in tax burden of about MNT 2.6 trillion; illustrative impacts show monthly PIT for a MNT 1 million earner falling from MNT 152,000 to MNT 53,000, and for a MNT 3.5 million household from MNT 534,000 to MNT 213,000. Parliament continues review alongside social-work legislation and oversight follow-up on Oyu Tolgoi.

Local Coverage: eagle.mn, ikon.mn, montsame.mn, isee.mn, gogo.mn, news.mn, itoim.mn, urug.mn

From daily briefs: 2025-12-23, 2025-12-25

8. U.S. Sanctions ICC Appeals Judges Including Mongolia’s D. Erdenebalsuren Over Israel-Related Rulings

The U.S. State Department on December 15 sanctioned two International Criminal Court Appeals Chamber judges — Erdenebalsuren Damdinsuren of Mongolia and Gocha Lordkipanidze of Georgia — alleging they “directly participated” in ICC actions targeting Israeli officials without Israel’s consent, invoking Executive Order 14203. Sanctions impose U.S. entry bans and asset freezes for the judges and their family members; Washington cited a December 15 vote by the judges against an Israeli appellate decision tied to the court’s pursuit of arrest warrants related to Gaza operations.

The move, the third round of U.S. measures tied to Israel–Gaza ICC work, sharpens tensions between Washington and The Hague: ICC Assembly leadership called the sanctions an interference with judicial independence while Human Rights Watch warned they undermine accountability. U.S. officials framed the action as consistent with non‑membership in the Rome Statute and resistance to ICC jurisdiction over U.S. and Israeli nationals, a stance likely to prompt diplomatic friction in states with nationals serving at the court.

Local Coverage: isee.mn, unuudur.mn, ikon.mn

From daily briefs: 2025-12-20, 2025-12-23

9. Erdenet CEO Urges Floating Royalties, Says Fixed AMNAT Blocks New Copper Projects

Erdenet Mining Corporation’s director general G. Yondon has urged Mongolia to replace its fixed mineral royalty (AMNAT) with a floating, price-linked model, arguing the current system — which he says effectively results in a 21.6% burden on Erdenet — undermines new copper projects and exploration. Yondon proposed lowering the statutory AMNAT rate while preserving roughly MNT 1.8 trillion in annual state receipts from Erdenet via government-ordered dividends, and argued royalties should vary by commodity and processing stage to reflect different costs and protect domestic producers during price downturns (ikon.mn).

He warned that the present fixed-royalty approach blocks development of major deposits such as Kharmagtai and Tsagaan Suvarga and could prevent the emergence of future large-scale mines comparable to Oyu Tolgoi or Erdenet. Citing international precedent for flexible royalties, Yondon framed the change as necessary to sustain investment and project viability across commodity cycles.

Local Coverage: ikon.mn

From daily brief: 2025-12-26

10. Visa‑Free Access Extended to 34 Countries, South Korea Addition Directed by Prime Minister

Mongolia’s Cabinet has approved extending visa‑free entry to citizens of 34 countries and, at the Prime Minister’s instruction, is adding South Korea to that list, Culture, Sports, Tourism and Youth Minister Ch. Undram said. The government will also introduce a streamlined e‑visa ("I visa") with a USD 5 fee to speed approvals; tour operators in South Korea are already signalling strong demand for 2025. Winter arrivals currently account for only about 20% of annual visitors, prompting planned measures such as a coordinated “winter discount month,” ice and camel festivals, and efforts to establish regular international flights to regional hubs following successful charters (for example, Busan–Khuvsgul).

The move aims to boost inbound tourism and diversify seasonal flows while requiring complementary infrastructure and services: the ministry highlighted priorities including sanitation facilities and food service upgrades in partnership with other ministries. Minister Ch. Undram also said visa decisions will be made and announced earlier, reflecting a push for more predictable, tourism‑friendly policy implementation.

Local Coverage: news.mn

From daily brief: 2025-12-25

About This Weekly Digest

The stories above represent the most significant developments from Mongolia this week, selected through our AI-powered analysis of hundreds of local news articles.

Stories are drawn from our daily intelligence briefs, which synthesize reporting from Mongolia's leading news sources to provide comprehensive situational awareness for international decision-makers.