Mongolia Weekly: Mongolia targets OT governance reset, advances CHP-5 PPP, deepens China zone ties

September 26, 2025 to October 2, 2025

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

1. Parliamentary Panel Moves to Rebalance Oyu Tolgoi Governance and “Onrè” Stake, Eyes Contract Changes

A Mongolian parliamentary oversight committee has launched intensified scrutiny of governance, financing and licensing arrangements around the Oyu Tolgoi copper-gold project, forming a task force to align the state’s equity in Ontre/Onrè LLC (which holds Javkhlant and Shivee Tolgoi licenses covering roughly 32% of the deposit) with law and negotiate changes before a Dec. 31, 2025 window. Industry and Minerals Minister G. Damdinyam and committee chair O. Batnairamdal flagged several reforms under consideration — adding independent board members, restoring certain state veto powers curtailed by a court decision, revising marketing and financing rights, and potentially replacing Mongolia’s 34% in-project equity with a special royalty (proposed by MP P. Sainzorig).

Key financial issues include alleged undisclosed 2011 shareholder-agreement changes, intercompany borrowing disparities (Ontre reportedly borrows from Oyu Tolgoi at ~6.7% while the project pays 11.1% on shareholder loans set in 2009), and cumulative shareholder debt now near US$12 billion. The government has built a new FAST‑standard financial model (Erdenes Mongol says it is ~90% complete) and prepared three negotiation scenarios; Mongolia is pressing for a reduction of loan interest to roughly 3.2–4.5% (investors have countered up to 8%), arguing a 3 percentage‑point cut could raise state returns by about US$2 billion.

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

From daily briefs: 2025-09-26, 2025-09-30, 2025-10-02, 2025-10-03

2. Ulaanbaatar Advances PPP Deal for 300 MW CHP-5, Clears Contractor’s Compliance and Targets 30-Month Build

Ulaanbaatar has finalized a public–private partnership to deliver a 300 MW, 340 Gcal/h CHP-5 at the former TPP‑2 ash yard, selecting Cambodia‑registered Mitime International after a seven‑month, four‑stage tender (70% financing capacity, 30% technical). Under the deal the city will cover 20% of the roughly $658.5 million capex (developer 80% finance); a 2021 feasibility update projects a 14‑year payback and a 25‑year power offtake at $0.088/kWh, with commissioning targeted within 30 months. City officials said Mongol Bank and judicial checks found no sanctions or money‑laundering records for Mitime.

Separately, Ulaanbaatar plans a 93 MW gas‑fired heating/peak‑load plant in Sukhbaatar District (9th khoroo) to serve the Denjiin Myanga sub‑center; the Capital City Governor’s Office will fund 20% of an estimated MNT 100 billion budget and launch an international PPP tender in 2025. Officials frame both projects as critical to easing acute power/heat capacity shortfalls that have constrained housing, schools and industry, improving winter reliability and air‑quality outcomes while adding infrastructure and jobs.

Local Coverage: ikon.mn, news.mn

From daily briefs: 2025-09-29, 2025-10-01

3. Cabinet Approves Master Plan to Jointly Develop Zamiin-Uud–Erenhot Economic Cooperation Zone

Mongolia’s Cabinet approved a master plan to jointly develop the Zamiin-Uud–Erenhot Economic Cooperation Zone under the existing bilateral agreement with China, assigning implementation to Deputy Prime Minister S. Amarsaikhan and Foreign Minister B. Battsetseg and directing all ministers to coordinate on free zone infrastructure within their legal mandates. The move targets Mongolia’s busiest land gateway with China and aims to formalize cross-border industrial, logistics and trade facilitation by aligning customs, transport and investment procedures and supporting free zone construction.

While no timeline or budget was disclosed, designating senior officials to lead regulatory and project coordination signals an intent to move quickly on near-term measures to reduce congestion and accelerate throughput for exporters and importers at the Zamiin-Uud–Erenhot crossing. International businesses and logistics operators should monitor subsequent regulatory changes and infrastructure plans that could affect transit times and investment conditions.

Local Coverage: gogo.mn, unuudur.mn, montsame.mn, eagle.mn

From daily brief: 2025-10-02

4. Government Marks 100 Days with Reform Agenda as Teachers Rally for Pay Raises; Political Infighting Surfaces

Prime Minister G. Zandanshatar used the government’s 100-day review to unveil a five-year, 10-pillar reform agenda emphasizing fiscal tightening, governance digitization, and export-led growth—highlighting improved Fitch rating categories, stronger coal exports tied to ETT restructuring, reported budget savings, steadier inflation and higher reserves. The administration says the package will include digital and governance reforms to bolster fiscal discipline and investor confidence; implementation and fiscal trade-offs will be watched closely by markets and parliament given the reform scope.

Concurrently, labor and political pressures are rising: the Education and Science Workers’ Union formally demanded higher teacher salaries and warned of escalated action if negotiations stall; Education Minister P. Naranbayar proposed phased salary increases over three years contingent on broader fiscal decisions. Political infighting surfaced as Parliament Speaker D. Amarbaysgalan denied links to the mining firm “Admineral” and accused rivals of weaponizing law enforcement against party delegates. Separately, police are investigating the death of a missing two‑year‑old found 3–4 km from the disappearance site in Huvsgul.

Local Coverage: eagle.mn

From daily brief: 2025-09-28

5. Truckers Protest New ₮150,000 Road Fee for Mining and Fuel Haulage; Police Block Convoy at City Approach

The Mongolian government on September 2, 2025 adopted Cabinet Resolution No. 77 raising road‑use charges to ₮150,000 for heavy vehicles transporting mining products and fuel on national and international highways, effective October 1. In response, freight drivers organised a planned rally in central Ulaanbaatar; police halted hazardous‑goods vehicles near the Sapporo intersection, citing safety rules that bar fuel tankers from the city centre. No injuries or arrests were reported.

The dispute underscores rising tension between haulage operators and authorities over cost pass‑throughs in the mining supply chain and potential downstream effects on fuel distribution and commodity logistics. The government has not published compensatory measures or a phased implementation plan, leaving uncertainty for haulage schedules, pricing on key corridors and operational planning for international shippers and energy suppliers.

Local Coverage: ikon.mn

From daily brief: 2025-10-03

6. Bahrain Backs Import Framework to Open Market for Mongolian Meat and Livestock

Mongolia and Bahrain have agreed to establish a legal framework to begin exports of meat, meat products, and live sheep and goats to the Kingdom following talks between Mongolian Ambassador P. Sergelen and Bahrain’s Ministry of Municipalities and Agriculture Affairs. Mongolia has secured Halal accreditation through the GCC Accreditation Center and has already begun initial chilled mutton exports to Kuwait and Qatar; live animal exports remain under discussion. Bahrain’s Assistant Undersecretary for Livestock, Dr. Ibrahim Yousif Ahmed, said he supports diversifying meat imports and will convene a near-term virtual meeting to finalize health certificate terms and establish direct links between Mongolian exporters and Bahraini importers.

Dr. Fajer Sabah Al‑Salloom, Director of Animal Health and OIE Vice‑President, confirmed Bahrain now registers Halal certificates and will review Mongolia’s proposed veterinary certificates, potentially aligning Bahrain with Kuwait and Qatar as a unified Gulf entry point for Mongolian suppliers. For international trade professionals, the development signals an expedited market opening in the GCC that could increase Mongolian access to Gulf demand for chilled mutton and, pending certificate agreement, live small ruminants.

Local Coverage: ikon.mn

From daily brief: 2025-10-01

7. Parliament Panel Backs Scrapping 2% Property Sale Tax; Early Screening Halted and Rare Earth Hearing Draws Scrutiny

A parliamentary petitions panel has recommended abolishing the 2% tax on real estate sales after a citizen initiative reportedly collected 100,000 signatures; the proposal now goes to the Budget Standing Committee, signaling potential fiscal and housing market impacts if enacted. Separately, the Health Insurance General Office notified state hospitals that government-funded early screening programs will be suspended from October 1 indefinitely while screening packages are reviewed and updated, creating short-term disruption to preventive services.

In oversight and other developments, a high-profile hearing scrutinized the “Khalzan Buregtei” rare earth project in Khovd—officials outlined national reserves and pilot studies while MPP caucus leader J. Bat-Erdene warned of economic risk if deposits are not developed and criticized intimidation around the debate. Cultural and social notes: the Australia–Mongolia–Germany co‑production “The Wolves Always Come at Night” was chosen as Australia’s official submission for the 2026 Oscars, and police in Khuvsgul reported recovery of a missing toddler’s body with investigations ongoing.

Local Coverage: news.mn

From daily brief: 2025-09-29

8. Stronger Dollar Lifts Import Costs as Inflation Quickens to 8.8%

Mongolia’s tugrik weakened to MNT 3,592 per US dollar on September 25, extending roughly a 5% depreciation since January and breaching the MNT 3,600 area in recent sessions, as a stronger dollar pushes up import costs and helps drive inflation to 8.8% in August. Energy and transport prices, together with higher government outlays, are biting into purchasing power even as GDP expanded 5.6% in H1 2025 and industrial output reached MNT 27.1 trillion in August—supported by mining volumes, firmer metals prices and external demand, with agriculture and select manufacturing also contributing.

The currency slide boosts exporters’ revenues but strains import-reliant firms and raises risks to sectoral stability if volatility persists. Economists caution that ongoing fiscal expansion could stoke further price pressures, underscoring the need for tighter budget discipline and prudent foreign reserve management to safeguard macro stability.

Local Coverage: news.mn

From daily brief: 2025-09-27

9. Cabinet Backs National Strategy on Big Data and AI, Targets Top-10 Standing in Asia by 2030

The Cabinet has endorsed a draft National Strategy on Big Data and Artificial Intelligence presented by Minister of Digital Development, Innovation and Communications E. Batshugar, and ordered its objectives and KPIs be integrated into the 2026–2030 five‑year development plan. The strategy sets four goals, 13 pathways and 66 measures to be implemented in two phases between 2026 and 2030, aiming to build an AI ecosystem, develop and export domain models for mining, fintech and environmental sectors, and deploy AI across health, education and agriculture to boost public‑sector productivity and services.

To enhance competitiveness and attract investment, the government will create an investor‑friendly legal framework for international data centers and has set an explicit target of reaching a top‑10 position in Asia by 2030. The Cabinet also approved related governance measures — tighter oversight of small‑scale mining, finalization of borders for 19 protected areas — and accelerated implementation of the 2024–2028 government action plan, signaling coordinated policy and regulatory efforts to support the strategy’s rollout.

Local Coverage: montsame.mn

From daily brief: 2025-09-26

10. Ruling Party Expels MP B. Enkhbayar as PM Pushes His Appointment as Justice Minister; Parliament Stalls Vote

Mongolia’s ruling Mongolian People’s Party (MPP) expelled MP B. Enkhbayar after he accused Speaker D. Amarbayasgalan of involvement in “coal theft,” even as Prime Minister G. Zandanshatar formally nominated Enkhbayar to be Minister of Justice and Home Affairs. The MPP Control Committee voted late-night to remove Enkhbayar, prompting at least seven MPP MPs to threaten to quit the caucus and the party unless the decision is reversed; senior party member B. Tsogtgerel has also begun collecting signatures from the MPP General Council (targeting 300 of 470 members) to formally refer further disciplinary action to the 21‑member Control Committee chaired by B. Bayarbaatar.

Parliamentary leaders stalled the ministerial nomination—Cabinet Secretary S. Byambatsogt said the item was not placed on the day’s agenda—deepening an institutional standoff that risks stalling work on the 2026 budget, which faces a legal passage deadline of November 15. The opposition Democratic Party caucus walked out and urged Speaker Amarbayasgalan not to preside pending investigation of the allegations, while Finance Minister B. Javkhlan insisted committee reviews continue and the budget timetable remain unchanged. The dispute highlights intra‑MPP accountability battles and raises short‑term governance risks as Mongolia navigates anti‑corruption reforms and fiscal pressures ahead of next year’s budget.

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

From daily briefs: 2025-10-01, 2025-10-03

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.