Mongolia Weekly: Mongolia scrutinizes Oyu Tolgoi costs, ramps coal exports, secures ADB funding

December 6, 2025 to December 12, 2025

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

1. Parliamentary Inquiry Probes Oyu Tolgoi Financing Costs and Mongolia’s Returns

Mongolia’s Parliament has resumed a high‑profile public inquiry into financing and benefit-sharing at the Oyu Tolgoi copper‑gold project, scrutinizing the 2009 Investment Agreement, subsequent amendments (notably a 2011 re‑set to SOFR/LIBOR+6.5%), shareholder loans, management fees and the state’s effective returns. Over five days of hearings beginning December 8–10 and continuing in December, a temporary committee has summoned some 301 witnesses and reviewed roughly 92,000 documents (about half marked confidential). Key issues flagged include high effective shareholder loan rates (averaging ~8% over 15 years with peaks above 10%), a US$4.4bn project finance facility backed by a Rio Tinto guarantee, a reported US$20bn of combined loans and payables by end‑2025, and a clause delaying dividends until full debt repayment—factors MPs and critics say have pushed Mongolia’s take toward ~27% rather than earlier expectations above 50%.

Testimony from former Finance Minister S. Bayartsogt, Oyu Tolgoi CEO S. Munkhsukh, former board members and Entrée Resources executives has been conflicting: Bayartsogt defended compliance with legal constraints and said terms improved after 2011, Munkhsukh reports the mine just turned cash‑flow positive and talks to lower loan rates and cancel fees are underway, while critics such as E. Bayasgalan and MPs pressed for urgent renegotiation and greater transparency. The committee is also re‑examining the Javkhlant (MV‑15225) and Shivee Tolgoi (MV‑15226) licences, state equity mechanics (34% carry), missed opportunities to supply domestic power, and governance capacity at state shareholder Erdenes Oyu Tolgoi. A final report is due in early 2026 and could prompt contractual adjustments affecting investor relations, Mongolia’s fiscal receipts and project financing costs.

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

From daily briefs: 2025-12-06, 2025-12-09, 2025-12-10, 2025-12-11

2. Government opens Oyu Tolgoi road to coal trucks and targets 150,000 t/day through Gashuunsukhait while pushing China talks

Mongolia’s Cabinet has approved measures to ease congestion at the Gashuunsukhait border and boost coal exports, reallocating 5.3 hectares from Smart Eco Trans to the Border Port Authority and permitting the Oyu Tolgoi special-use road to carry coal outside its current 10:00–14:00 copper concentrate window. Authorities expect traffic on that route to rise to more than 1,500 coal trucks per day (up from the current 1,400 daily trucks through the port); year-to-date coal exports stand at 41.2 million tonnes and rail-coal handling has reached 3.5 million tonnes in 2025.

The government is pursuing parallel rail and diplomatic strategies: a planned cross-border rail link due to open in April 2027 aims to lift rail capacity to 30 million tonnes annually and, together with road haulage, push combined volumes above 100 million tonnes. Transport Minister B. Delgersaikhan said negotiators are pressing China to increase daily truck crossings and target 150,000 tonnes per day for the remainder of the year, signalling a short-term surge in road shipments while longer-term capacity hinges on the 2026–27 rail expansion.

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

From daily brief: 2025-12-11

3. ADB Extends $100 Million Facility to Khan Bank to Scale Rural and Agribusiness Lending

The Asian Development Bank has signed a five-year financing agreement to provide Khan Bank up to $100 million to expand rural and agribusiness lending across Mongolia. The facility — ADB’s largest ever to a Mongolian financial institution — is earmarked for farmers, herders, processors, micro and small-to-medium enterprises (MSMEs) and women-led businesses, and will align with Khan Bank’s agriculture cluster strategy to boost productivity, value‑chain processing and exports. Khan Bank’s nationwide network of 548 branches and digital channels reaching about 82% of the population positions it to deploy capital across provinces.

ADB framed the deal as a targeted response to persistent financing gaps for micro and small enterprises and a tool to support economic diversification; Shannon Cowlin, ADB Country Director for Mongolia, highlighted expected gains in productivity and incomes for women entrepreneurs, farmers and herders. Khan Bank CEO R. Munkhtuya emphasized the financing’s role in expanding rural capital access and fostering agricultural innovation (ikon.mn; news.mn).

Local Coverage: ikon.mn, itoim.mn, isee.mn, news.mn

From daily brief: 2025-12-10

4. Russian Refinery Strikes Tighten Fuel Export Capacity, Raising Mongolian Supply Risk

Mongolia’s fuel security is increasingly at risk as repeated Ukrainian drone strikes in 2025 have curtailed capacity at several key Russian refineries that supply the country. Major Rosneft plants—Ryanań, Novokuibyshevsk, Kuibyshev, Saratov and Afipsky—have experienced unit shutdowns, storage or logistics damage and intermittent outages; analysts estimate disruptions have affected as much as 17–20% of Russia’s refining capacity at times, equivalent to roughly 17,700 tons/day of gasoline and 35,100 tons/day of diesel. While Russia’s nationwide throughput reportedly fell only about 3% due to spare capacity and rerouting, Mongolia imports about 95% of its fuel from Russia and Rosneft alone supplies roughly 75% of its needs.

Given Moscow’s August 1 export restrictions and the ongoing operational risks, Mongolia faces a heightened probability of recurring shortages and rationing cycles. For international energy and security professionals, the situation underscores the vulnerability of single-supplier dependencies and the potential need for accelerated diversification of import sources, strategic reserves and contingency logistics planning.

Local Coverage: itoim.mn

From daily brief: 2025-12-06

5. OT CEO Warns Rusal–Rio Tinto Dispute Could Pull Oyu Tolgoi into Litigation

Oyu Tolgoi LLC CEO S. Munkhsukh warned that an escalating legal dispute between Russia’s aluminum producer Rusal and miner Rio Tinto over an Australian smelter could pull the Mongolian copper-gold project into litigation. The disagreement arose after sanctions-related disruptions affected a product‑sharing agreement at the smelter, which Rusal owns 20% of and Rio Tinto 80% of; Australia’s High Court recently ruled in favor of Rio Tinto enforcing the contract, and Rusal has responded by initiating proceedings in Russian civil courts.

Munkhsukh said the cross‑jurisdictional legal moves increase the likelihood that Oyu Tolgoi—operated by Rio Tinto in Mongolia—could be drawn into related proceedings, potentially complicating governance and operational risk for the project. For international stakeholders, the case underscores how sanctions and multi‑venue litigation between major partners can create contagion risks for jointly operated assets.

Local Coverage: itoim.mn

From daily brief: 2025-12-11

6. Government Seeks World Bank Support to Build Disaster Risk Financing and Response Systems

Mongolia’s Deputy Prime Minister and National Emergency Commission head Kh. Ganhuyag met with World Bank Country Manager Taehyun Lee to expand cooperation on disaster risk management, signaling a push to modernize the country’s resilience architecture. The government plans legal and institutional reforms to strengthen rapid command-and-control, deploy advanced technologies, and build an effective early warning system; it has proposed technical-assistance projects to design financial mechanisms, including contingent risk financing—a new instrument for Mongolia but widely used in disaster-prone countries.

The World Bank committed to support development of financing sources and contingent risk reserves, and both parties agreed to further studies and information exchanges to structure implementation and an operational roadmap. For international practitioners, the engagement highlights Mongolia’s shift toward pre-arranged fiscal risk instruments and donor-backed technical design work that could accelerate timely post-disaster liquidity and reduce fiscal volatility.

Local Coverage: montsame.mn

From daily brief: 2025-12-08

7. Rio Tinto Backs New Underground Mining Institute to Train Specialists in Mongolia

Rio Tinto has funded the launch of the Underground Mining Institute of the Umnugovi in Mongolia to address a projected global shortfall in advanced underground mining skills as experienced engineers in the U.S., Australia and Europe approach retirement and university programs wane. Led by Prof. Andre van As of the University of Queensland’s Sustainable Minerals Institute, the institute is delivering a 10‑module, practice‑oriented curriculum at Oyu Tolgoi with instructors drawn from the U.S., Canada, Australia and the U.K.

The first cohort—27 participants from Oyu Tolgoi, Erdenes Oyu Tolgoi and the Mongolian University of Science and Technology—completed intensive modules in block caving engineering, numerical modelling, ground support, ventilation and drilling/blasting and received certificates on 5 December 2025. The program intends to train Mongolian instructors over three years for sustained local delivery, to scale internationally, and to open broadly to applicants from 2026, positioning Mongolia as a regional centre for underground mining expertise.

Local Coverage: gogo.mn

From daily brief: 2025-12-06

8. Parliamentary Panel Advances Probe Into “Harbin Agreement” Coal Pricing and Cross‑Border Rail Deals

Parliament’s Economic Standing Committee has approved creating a temporary oversight panel to probe the “Harbin Agreement,” a package signed February 17 covering Gashuunsukhait–Ganqmod cross‑border rail construction, long‑term coal offtake and mine capacity expansion. The motion, put forward by MPs J. Bayarmaa and D. Ganbat with 40 co‑sponsors, passed committee with 64.7% support and will go to a plenary vote on December 12; it cleared prior procedural obstacles after a rival initiative by MP L. Oyun‑Erdene failed to advance. Lawmakers seek declassification of the deal, review of negotiation records and expert analysis to determine whether pricing terms—reportedly linked to discounts versus exchange prices and committing volumes of 27 million tonnes in 2025–2029 and at least 20 million tonnes annually from 2030—have disadvantaged Mongolia or led to multi‑billion‑dollar revenue losses.

MP J. Bayarmaa emphasized that independent experts, not MPs, will conduct the review and urged price revisions if warranted to protect fiscal revenues and export plans, while the panel will also examine safeguards against coal “cherry‑picking” quality differentials. The outcome could reshape Mongolia–China rail logistics and set precedents for how long‑term commodity pricing and cross‑border infrastructure deals are negotiated and disclosed.

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

From daily briefs: 2025-12-09, 2025-12-10

9. Water Agency Chief Says Oyu Tolgoi Avoids Pollution Fees, Flags Large Seepage From Tailings Dams

At a parliamentary evidence review, Water Agency head Z. Batbayar accused Oyu Tolgoi of being the sole Mongolian mining operator not to pay water pollution fees, citing an omission in its 2009 investment agreement. Batbayar said inspectors fined the mine MNT 700 million last year after detecting significant seepage from two tailings dams and noted a subsurface barrier and pumping system has been installed to capture and return seepage; discussion is also underway about a third tailings-site reportedly outside the current license area.

Batbayar further stated that since September 2023 all mines are required to pay for camp water use, but Oyu Tolgoi — which reportedly consumes 15–20 million m3 of water annually, pays about MNT 15 billion, and recycles 87% of its water — has not paid the pollution fee. The allegations raise compliance and environmental-risk questions for Mongolia’s largest copper-gold project and could prompt regulatory or contractual scrutiny of legacy investment agreements.

Local Coverage: urug.mn

From daily brief: 2025-12-10

10. Constitutional Court to Review Challenge to Mining Law Allowing State to Take Up to 50% for Free

Mongolia’s Constitutional Court will review a challenge to 2024 amendments to the Minerals Law that allow the state to take up to 50% of a strategic deposit operator’s shares for free when exploration was state‑funded, and 34% for free when it was not. The revisions, introduced under former MP B. Battömör and ex‑Prime Minister L. Oyun‑Erdene, are alleged by petitioning lawyers to breach constitutional property protections and compensation requirements by effectively permitting uncompensated state appropriation and capping private ownership above 34%.

Legal representatives, including lawyer B. Bayaraa, argue the amendments replace prior practice—where state equity reflected negotiated reimbursement for actual investment—with a statutory confiscation that shifts commercial risk onto investors and could deter investment in Mongolia’s strategic mineral sector. The Court’s ruling will determine whether the new statutory entitlements are compatible with constitutional guarantees and could have significant implications for mining investment and state‑private risk allocation.

Local Coverage: isee.mn

From daily brief: 2025-12-06

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.