Mongolia Weekly: Mongolia tightens Oyu Tolgoi terms, boosts copper capacity, deepens China trade

January 10, 2026 to January 16, 2026

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

1. Trade Surplus Expands to USD 4.4 Billion as Imports Fall and Copper, Gold Shipments Rise

Mongolia recorded a merchandise trade surplus of USD 4.4 billion in 2025 on total trade of USD 27.0 billion, with exports of USD 15.7 billion and imports of USD 11.3 billion, according to the Customs General Administration. Total trade fell 1.4% year‑on‑year while the surplus widened by USD 220.7 million as imports declined USD 302.6 million—led by sharp drops in trucks, heavy machinery, public transport vehicles and passenger cars—while exports slipped USD 81.9 million amid falls in coal (despite coal volumes rising 5.6% to 83.9 million tonnes), washed cashmere, crude oil and knitwear. Mineral exports remained dominant: coal and copper concentrate together generated roughly 72.4% of export receipts (coal revenue USD 5.6 billion; copper concentrate USD 5.8 billion), and December 2025 alone saw a record USD 2.0 billion in export revenue driven largely by minerals.

The data signal resilient, resource‑driven earnings but continued concentration risk and exposure to China‑centric demand and logistics: China supplied 40.7% of Mongolia’s imports and remains the primary destination for bulk exports. Beijing’s 2026 stance to retain coal in its energy mix under tighter regulation—favoring medium‑ and long‑term contracts and prioritizing domestic output—creates both opportunity for Mongolia’s high‑quality coking coal and downside risk from policy shifts, quality standards and infrastructure bottlenecks. For international professionals, the trends point to near‑term fiscal and balance‑of‑payments support from commodity flows, tempered capital‑goods import weakness, and elevated sensitivity to Chinese demand and global price cycles.

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

From daily briefs: 2026-01-10, 2026-01-13, 2026-01-14, 2026-01-15

2. Ulaanbaatar and Beijing Set 2026 Target to Lift Bilateral Trade to USD 20 Billion

On January 13, Mongolian Prime Minister G. Zandanshatar met Chinese Ambassador Shen Minjuan and affirmed a joint target to raise Mongolia–China bilateral trade to USD 20 billion by 2026, up from roughly USD 16.5 billion today. The leaders reiterated plans to align Mongolia’s five‑year development plan with China’s 15th Five‑Year Plan and to negotiate transit arrangements to diversify export routes and reduce logistics bottlenecks to third‑country markets.

A Mongolia–China B2B forum in Ulaanbaatar brought together over 300 companies and government bodies, underscoring China’s roughly 80% share of Mongolia’s trade and highlighting investor interest in mining, agriculture, light industry and construction. Business representatives flagged obstacles—tax clarity, labor rules, customs procedures and asymmetric duties (China’s 17% import duty versus Mongolia’s 5%)—and urged legal and infrastructure reforms (energy, heating, digital) to unlock further investment. Chambers of commerce signed an MoU to deepen practical cooperation and support exporters.

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

From daily briefs: 2026-01-10, 2026-01-15

3. Parliament Orders Tougher Oyu Tolgoi Terms as Government Resets Negotiating Team

Mongolia has set 2026 as a decisive year for renegotiating terms at the Oyu Tolgoi copper‑gold complex after Parliament approved a resolution to raise the state’s total benefit from the project to 53%. The government has refreshed its negotiating team to engage Rio Tinto and Oyu Tolgoi LLC, prioritizing lower interest on project debt secured against the deposit, consolidation of related deposits, and routing company revenues through the Bank of Mongolia. Oyu Tolgoi accounts for roughly half of Mongolia’s foreign direct investment and has paid MNT 13.7 trillion in taxes since 2010; future tax receipts are projected to rise as much as threefold.

Parliament’s move follows public hearings alleging excessive management costs and high‑interest financing; security and anti‑corruption agencies have been tasked to review potential criminal elements. Oyu Tolgoi has separately said Mongolia’s take could reach 61%, while Rio Tinto and Oyu Tolgoi LLC have not publicly responded to the resolution. The reset raises geopolitical and fiscal stakes for investors and underscores Ulaanbaatar’s push for greater control and revenue capture from its largest foreign investment.

Local Coverage: news.mn

From daily brief: 2026-01-16

4. Erdenet Mining to Build $800m Smelter, Targets 120,000 t/y Refined Copper as Reserves Certified to JORC Standard

Erdenet Mining Corporation reported record 2025 results and moved forward with a long‑planned smelter project: the state‑owned miner processed 39.9 million tonnes of ore, exported 574,000 t of concentrate, generated MNT 4.6 trillion in revenue (MNT 2.2 trillion paid to budgets) and sold $1.2 billion to the central bank. Its Central deposit reserves were re‑certified under the JORC standard, extending mine life to 55 years, while a new “Oyut” discovery adds further long‑term resource upside.

The company will tender for a strategic investor to build an $800 million smelter to treat 560,000 t/y of concentrate into 120,000 t/y refined copper; required bidders must supply patented technology, investor financing and proven smelting experience. Infrastructure for water, rail and the industrial park is largely complete. Erdenet’s base LME price assumptions are $9,486/t for 2025 and $9,653/t for 2026, reflecting analyst expectations of some easing from recent $12,000–13,000/t peaks—key for project economics and investor interest.

Local Coverage: gogo.mn

From daily brief: 2026-01-14

5. Copper Prices Surge on Supply Disruptions and AI-Driven Demand; 2026 Deficit Forecast Deepens

Copper futures have surged into near-record territory, climbing from early-2025 levels by over 30% to $12,960/ton in late December and touching $13,390/ton on January 6, driven by a mix of acute supply shocks and pre-year‑end positioning. Production disruptions include landslide-related stoppages at Indonesia’s Grasberg expected into Q2 2026, reduced output at Chile’s Quebrada Blanca, incidents at Chile’s Teniente and disruptions at Congo’s Kamoa-Kakula; U.S. import‑tariff speculation also prompted precautionary stock-building that tightened near‑term inventories.

The rally underlines a structurally tighter market: Morgan Global Research forecasts a 330,000‑ton refined copper deficit in 2026, while Wood Mackenzie warns of a potential 6 million‑ton shortfall by 2030 without major new mine supply. Demand from expanding AI data centres and the energy transition is accelerating consumption, and higher prices could materially boost revenues for producers and resource states—Mongolia’s Oyu Tolgoi and Erdenet are positioned to produce more than 800,000 tons of concentrate annually, sharpening the fiscal and investment implications.

Local Coverage: montsame.mn

From daily brief: 2026-01-11

6. Ulaanbaatar Nears Completion of $462m MCC Water Compact, Adding Two Advanced Plants and Expanding Supply by 80%

Ulaanbaatar’s five‑year Water Compact, co‑financed by $350 million in U.S. Millennium Challenge Corporation (MCC) grants and $111.76 million from Mongolia, is 94% complete as of November 2025 and scheduled to close on March 31, 2026. The program delivers two first‑of‑their‑kind facilities: a deep water purification plant at the base of Songino Mountain fed by 30 new wells in Biokombinat and Shuvuun Fabrik (targeting roughly 50 million m³/year) and a wastewater reuse plant adjacent to the new central treatment facility to supply 14–18 million m³/year for thermal power plant cooling. Together these measures are projected to increase city water availability by over 80% and markedly reduce extraction from deep aquifers—important given that power plants consume about 20–24% of Ulaanbaatar’s demand.

Beyond infrastructure, the compact strengthens sector capacity and governance: Mongolian firms won major international tenders, local specialists received overseas training, and regulatory and utility systems were upgraded. All assets are due to be handed over to local authorities in 2026, setting a near‑term timeline for operational integration and potential replication in other water‑stressed, cold‑climate cities.

Local Coverage: gogo.mn

From daily brief: 2026-01-10

7. Ulaanbaatar Allocates ₮9.4 Billion to Introduce AI Across City Administration

Ulaanbaatar’s city government has approved a ₮9.4 billion allocation to roll out artificial intelligence and smart software across municipal agencies in 2026, partnering with private-sector vendors to automate labor‑intensive roles, centralize the capital’s data, and apply AI to tender evaluation and decision support. The program also includes a rationalization of digital tools: low‑usage internal and citizen‑facing apps will be reviewed and removed to reduce duplication across service providers.

The budget approval, though it did not disclose implementation timelines or selected vendors, signals a move toward standardized, data‑driven operations that could tighten procurement oversight and improve inter‑agency data integration. For international observers and potential partners, the initiative highlights opportunities in public‑sector AI deployment as well as questions about governance, vendor selection, and safeguards for transparency and accountability.

Local Coverage: ikon.mn

From daily brief: 2026-01-16

8. Trilateral Economic Corridor and Russia–China Gas Pipeline Project Backed in Meeting with Chinese Ambassador

Mongolia’s Deputy Prime Minister and Minister of Economy and Development J. Enkhbayar met with Chinese Ambassador Shen Minjuan to reaffirm bilateral support for the Mongolia–Russia–China economic corridor and to press for commencement of a cross‑border natural gas pipeline transiting Mongolia. Enkhbayar urged the intergovernmental commission to deliver measurable results, highlighted completed and ongoing upgrades in rail, border ports and airspace cooperation, and said Mongolia has formally submitted project proposals for inclusion in China’s 15th Five‑Year Plan; he also signaled a strategic pivot to broaden trade beyond mining into agricultural inputs for the Chinese market.

Ambassador Shen framed the corridor and pipeline as aligned with China’s “high‑quality development” priorities—citing AI and green sectors—and committed that Beijing will prioritize initiating the gas pipeline project. For international stakeholders, progress would strengthen trilateral connectivity, diversify Mongolia’s export base, and create new energy transit dynamics between Russia and China; key watch items are the intergovernmental commission’s deliverables, Beijing’s incorporation of Mongolian proposals into its 15th Five‑Year Plan, and timeline commitments for pipeline financing and construction.

Local Coverage: isee.mn

From daily brief: 2026-01-10

9. Erdenes Tavan Tolgoi Sets New Single-Day Coal Export Record in Early January

State-owned Erdenes Tavan Tolgoi set a new single-day export record on January 13, 2026, shipping 200,441 tonnes of coal in 1,475 truck trips—11,236 tonnes above its prior best. Most flows moved through the Gashuunsukhait crossing (168,712 tonnes via 1,241 trips), with additional volume via Hangi (31,729 tonnes via 234 trips). Exchange-traded coal hit a daily peak of 106,879 tonnes carried by 787 vehicles, the highest since the market-based transport system began in 2023.

The spike signals improved logistics and cross-border processing capacity, and sustained Chinese demand, especially via the Gashuunsukhait corridor. While the record could support stronger first-quarter revenue, continuation will depend on border stability, weather conditions and Chinese market dynamics; no official company statements accompanied the reports.

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

From daily briefs: 2026-01-15, 2026-01-16

10. Government Orders Unified Control at Zamiin-Uud Border, Reviews Free Zone Land Allocations and Logistics Coordination

Mongolia’s Cabinet, led by Prime Minister G. Zandanshatar, has ordered a comprehensive reset of governance and infrastructure coordination at Zamiin-Uud, the country’s principal road border with China, following his Jan 11–12 inspection of the free zone and road port complex in Dornogovi. Measures include rotating customs and border staff, creating unified management across border, inspection and local administrative bodies, fast-tracking a plan to grant the settlement city status by June 1, and funding completion of a 48-unit housing block for Border Troops Unit 0108. The government also launched a joint AGA–NPA–ISA task force to audit land allocations in the Zamiin-Uud Free Zone after public complaints and ordered a review of existing allocations against a new strategy aligned with international practice.

If implemented, these steps aim to reduce conflicts of interest, clarify commissioning responsibility for idle Chinese loan–financed assets (thermal and wastewater systems built 2011–2017), and improve cargo throughput and predictability for traders—critical as throughput has tripled since the 2023 passenger terminal opened. The government cited weak zone performance (104 registered firms but only 15 active; $3.6 million sales in 2025) as rationale for the reset; clearer oversight and accelerated infrastructure work are intended to increase investment readiness and convert Zamiin-Uud into a logistics hub.

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

From daily briefs: 2026-01-12, 2026-01-15

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.