Mongolia Weekly: Mongolia pushes OT terms, advances tax relief, opens Borteeg coal to investors

January 3, 2026 to January 9, 2026

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

1. Government to Press Rio Tinto for Stronger Oyu Tolgoi Terms and Clear Dividend Timeline

Mongolian Prime Minister G. Zandanshatar will formally press Rio Tinto and Oyu Tolgoi LLC to renegotiate terms after a parliamentary inquiry and open hearings (December 8–12, 2025) concluded existing investment and shareholder agreements inadequately protect Mongolia’s interests. The Cabinet has refreshed its negotiation working group and will demand a clear timeline for when the state’s 34% stake begins receiving dividends, enforce equal treatment of shareholders, require transparent cost and financial reporting with independent audits, and secure effective Mongolian participation in governance and decision-making.

If implemented, these measures could materially reshape governance, cost control and cash-flow allocation at one of the world’s largest copper projects, subjecting financing, expenditures and timelines to greater parliamentary scrutiny. Parliament’s temporary oversight committee cited delayed dividends, cost overruns and weakened state decision-making as drivers of the push—risks that, if unaddressed, may affect investor certainty and Mongolia’s fiscal planning.

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

From daily briefs: 2026-01-08, 2026-01-09

2. Parliament Sends Tax Overhaul to Budget Committee; Plan Seeks MNT 2.7 Trillion Relief for Households and Businesses

Parliament has referred a government-backed tax overhaul to the Budget Standing Committee after an expedited vote failed; if approved in the spring session the package would take effect 1 January 2027 and is designed to phase in roughly MNT 2.7 trillion in relief (about MNT 2.0 trillion for VAT and personal income taxpayers and ~MNT 700 billion for companies). The bundle amends four laws (General Tax Law, Corporate Income Tax, Personal Income Tax, and VAT Law) and proposes concrete measures such as full refunds of personal income tax on the first MNT 500,000 of monthly income, extension of amendment/correction windows to two years, compliance-based two‑month payment deferrals, and tiered VAT refunds to consumers (100% up to MNT 500,000, 50% up to MNT 1 million, 20% beyond).

For businesses the government proposes easing VAT input limits (including e‑receipts for raw materials), stopping automatic freezes of 20% of bank balances for arrears, raising the 1% turnover‑tax threshold from MNT 1.5 billion to MNT 2.5 billion, expanding simplified quarterly VAT for firms under MNT 400 million revenue, and adjusting corporate brackets—raising the 25% rate threshold from MNT 6 billion to MNT 10 billion of profit and taxing MNT 6–10 billion at 15%. Finance Minister warnings about local revenue shortfalls signal the need for additional transfers to cover the budget impact, making fiscal trade‑offs and implementation logistics the primary policy risks.

Local Coverage: news.mn, urug.mn, itoim.mn

From daily briefs: 2026-01-03, 2026-01-07, 2026-01-08

3. Cabinet Seeks Investors to Develop Tavan Tolgoi’s Borteeg Coal Block, Launching EOI on January 9

Mongolia’s Cabinet has formed a working group to prepare the Borteeg block of the Tavan Tolgoi coal deposit for investor-led development, launching an international Expression of Interest (EOI) on January 9 to solicit proposals. Borteeg—one of four areas held by state miner Erdenes Tavan Tolgoi JSC alongside Tsankhi, Bortolgoi and Onchkharaat—has a 2020 feasibility study and JORC-standard exploration; a verification feasibility study is scheduled for Q1 2026. Authorities plan a staged, transparent process: provide open information to potential bidders, run the EOI, then submit selections to the Government and Parliament.

Policy principles emphasise market-based coal pricing, domestic capture of most project benefits, and support for value-added processing, reflecting a broader push to monetise coal assets within five years amid forecasts of weakening global demand and prices after 2030. The timeline and insistence on transparency aim to attract credible international investors while preserving state and local economic interests.

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

From daily brief: 2026-01-08

4. Senior Legal, Customs, Judiciary and Security Roles Reassigned in Ongoing Government Reshuffle

Mongolian authorities continued a targeted reshuffle across legal, customs, judiciary and security institutions this week. President U. Khurelsukh reappointed M. Chinbat as Deputy Prosecutor General, preserving a prosecutor with 30 years’ experience at national and district levels. Parliament confirmed two non-judge members—Kh. Erdem-Undrakh and Ch. Bayanjargal—to the Judicial General Council, signaling efforts to reinforce judiciary governance. In the state holdings sector, Parliament named B. Davaadalai as acting CEO of Erdenes Mongol LLC; Davaadalai brings World Bank and government advisory experience relevant to state asset management.

The Cabinet removed Customs General Agency head R. Otgonjargal at his request amid corruption probes and installed deputy G. Enkhtaivan as acting director to push digital upgrades and corrective measures. In the Internal Troops, senior commanders were dismissed following a reported assault at Unit 05; Colonel J. Munkhsolong, previously Deputy and Operations Director, is serving as acting Chief of Staff pending a permanent appointment. Collectively, the moves reflect a consolidation of oversight and a managerial pivot toward accountability, digital modernization and stability in security and state enterprise leadership.

Local Coverage: news.mn

From daily brief: 2026-01-06

5. ETT Warns 2025 Dividend Payout Unlikely as Cash Funds Fuel Subsidized Fuel and Projects

Erdenes Tavantolgoi (ETT) signaled that it may not pay dividends from 2025 results as cash reserves are being diverted to state-mandated projects, notably subsidizing briquette fuel for Ulaanbaatar’s ger districts. Acting CEO N. Tserensambuu said ETT has transferred about MNT 1.5–2 trillion to Tavan Tolgoi Fuel over the past six to seven years to keep prices low for residents, and that the Board will decide on dividend distribution as many projects are being financed in cash (news.mn).

The announcement has reignited public backlash over the politicized “1072 shares” program, which has delivered modest payouts in 2020, 2022 and 2023. ETT reported a MNT 4.5 trillion net profit in 2024 and approved MNT 350,000 per shareholder in three tranches through April 2025, but debate persists between using profits for social programs versus regular shareholder dividends amid prior political pledges for more frequent distributions.

Local Coverage: news.mn

From daily brief: 2026-01-09

6. Cabinet Approves 300‑Day Plan to Accelerate Recovery and Freeze Fees Through 2026

The Cabinet has approved a 300‑day recovery plan aimed at “accelerating economic recovery and delivering benefits to citizens,” built on four pillars: stable household income without inflationary pressure, freer business activity, lean and accountable government, and a more resilient economy. Key commitments include freezing all state service fees and charges for the 2026 fiscal year and advising local councils not to raise subnational taxes and fees; staged pay rises for doctors, teachers and researchers effective 1 January 2026; expanded VAT gradation with higher refunds; and targeted support to stabilise herder incomes and boost cashmere and hides exports.

Officials cited macrostrength—headline growth of 5.9%, inflation at 8.2%, a positive balance of payments and US$6 billion in reserves—underpinned by gains in agriculture, construction, manufacturing and a Q3 mining rebound. Parliament also approved 2025–2026 budgets for the Erdenes Treasury core and transaction funds, while the Cabinet has earmarked MNT 516 billion to raise pensions in 2026, signalling a blend of fiscal support and protective measures to sustain recovery without immediate tax increases.

Local Coverage: news.mn

From daily brief: 2026-01-05

7. Ulaanbaatar Signs Public-Private Partnership Deal to Build Thermal Power Plant No. 5 as Generation Projects Advance

Ulaanbaatar has signed Mongolia’s first public-private partnership to develop Thermal Power Plant No. 5, marking the first new large thermal plant contract in 42 years and signalling a major push to expand urban power and heat capacity. The agreement accompanies rapid generation additions: Booroljuut coal plant’s second 150 MW unit was connected to the central grid on 18 October 2025, bringing Booroljuut to 300 MW and an estimated 2.4 TWh annual output. City-backed financing includes a MNT 500 billion domestic bond package, with MNT 300 billion already invested in Booroljuut.

District heating expansion is proceeding in parallel: the 63 MW Dambadarjaa heat plant began construction in April 2024 (about 40% complete) and targets commissioning in August 2026; 93 MW and 110 MW gas-fired heat plants near Nogoongiin Nuur and west of Khan Hills are in preparation; a 35 MW waste‑to‑energy project has a contractor selected; and a 24 MW Emeelt thermal plant is scheduled to start construction in 2026. Together, these projects indicate a coordinated municipal strategy to secure energy supply and heating resilience, while raising questions about fuel mix, financing exposure and environmental impacts as coal and gas capacity expand.

Local Coverage: unuudur.mn, urug.mn

From daily brief: 2026-01-03

8. Policy Shift Boosts Cashmere Exports as Mongolia Seeks to Reduce Mining Dependence

Mongolia’s export composition remains heavily skewed toward mining—93% of exports as of October—leaving the economy vulnerable to commodity cycles even as extractives drove 25% of GDP, 28% of budget revenue and 75% of FDI last year, Deputy Minister B. Enkhtuvshin said. Coal shipments rose to 94.6 million tons in 2025 (exceeding an 85 million-ton target), while additional shipments included 2.4 million tons of copper concentrate, 9.4 million tons of iron ore, 1.9 million tons of fluorspar and 161,300 tons of zinc concentrate. The government also announced construction of 200,000‑ton storage tanks for AI‑92 gasoline and diesel to bolster fuel security.

Policymakers are pushing immediate diversification toward agriculture—chiefly cashmere—after a 2022 technical regulation requiring exports at or above combed processing revived higher‑value shipments: by October 2025 Mongolia exported 2.9 million tons of combed cashmere worth $244 million, a fivefold year‑on‑year increase and 1.8x higher unit prices than washed fiber. Non‑mining sectors employ 75% of the workforce and account for 87% of GDP but face financing gaps, short loan tenors and labor shortages; central bank repo funds plus a late‑2024 industry loan program have disbursed about MNT 1.9 trillion, yet firms still report working‑capital constraints. With Mongolia ranked 117th of 134 on export diversification, analysts urge supply‑chain finance and logistics reforms to scale value‑added textiles and broader services exports.

Local Coverage: eagle.mn, unuudur.mn

From daily briefs: 2026-01-06, 2026-01-07

9. China’s Coking Coal Prices Fall, Eroding Mongolia’s Pricing Edge and Forcing Discounts

China’s domestic coking coal prices fell in November, narrowing the cost advantage of Mongolian supplies and forcing Mongolian exporters to cut offer prices, the Mongolian National Mining Association said. Average imported coking coal into China was about $98/ton versus a broader Asian average of $90; China imported 122 million tonnes in 2024 (up from 102 million in 2023), with Mongolia supplying roughly 57 million tonnes (46%), Russia 30 million (25%), and Australia about 10 million (8%) as trade with Australia remained subdued.

By late November, raw coking coal delivered via Gantsmod fell 85 yuan week-on-week to 1,005 yuan/ton, while washed coal dropped 50 yuan to 1,280 yuan/ton; trader inventories inside China edged up to 2.7 million tonnes. With short‑haul trucking from Tsagaan Khad to Gantsmod costing 90 yuan/ton (ex‑VAT), the price slippage erodes Mongolia’s pricing edge and increases pressure on Mongolian exporters to provide deeper discounts or risk losing market share to Russian and domestic Chinese supplies.

Local Coverage: ikon.mn

From daily brief: 2026-01-08

10. Civic Group Seeks Referendum on Dissolving Parliament, Sets Jan. 13 Assembly

A civic initiative calling itself the “Public Referendum” movement has launched a campaign to hold a nationwide referendum on whether to dissolve Mongolia’s State Great Khural (parliament). The group, led by retired army colonel D. Batsukh, said it will hold an inaugural assembly on January 13; roughly 6,000–7,000 people registered online but venue limits will cap attendance at about 1,100. Organizers are collecting signatures under Article 39 of the Law on Parliament, noting that 100,000 e‑signatures within 30 days would trigger a draft proposal, though any actual referendum would still require approval by two‑thirds of the 126 MPs—an exacting political hurdle.

The campaign frames the effort as a legal test of public confidence in the legislature amid sustained public frustration over governance and corruption. For international observers and investors, the initiative illustrates growing civic mobilization and presents a potential stress test for Mongolia’s political stability: even if signature thresholds are met, the requirement of supermajority parliamentary consent means the movement’s success will hinge on elite political dynamics as much as popular sentiment.

Local Coverage: ikon.mn, urug.mn, news.mn

From daily brief: 2026-01-07

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.