Can Northeast Asia’s New Geopolitical Reality Create Opportunities for Mongolia? www.thediplomat.com

Within the emerging geopolitical landscape, Mongolia may have opportunities to diversify its economic partners.

Northeast Asia’s geopolitical environment is transforming rapidly. While Russia’s war in Ukraine created opportunities for North Korea to re-engage the world, the recent joint declaration by Russia and China signals to global actors that deeper regional cooperation mechanisms are at play. In this evolving geopolitical environment, Mongolia, too, will have options to diversify its partners and expand economic opportunities. 

Since the end of World War II, Mongolia has positioned itself as an active player in promoting peaceful dialogues and conflict resolution to global and regional conflicts. Particularly in Northeast Asia’s context, Mongolia has been a voice of diplomacy, and preferenced soft power over hard power when dealing with issues such as the denuclearization of North Korea, the unification of the two Koreas, and building a robust system of regional connectivity. 

In Mongolia’s diplomatic efforts and by maintaining strong historical links with both Seoul and Pyongyang, Ulaanbaatar became a vessel for diplomacy and cultural engagement with both countries. Strategically, by strengthening these relationships, Mongolia aims to reduce its landlocked economic vulnerability. Within the emerging geopolitical landscape, Mongolia may have opportunities to diversify its economic partners.

Considering Mongolia and North Korea’s historic diplomatic ties, there are existing cooperation mechanisms and projects at hand. For example, in 2013, during a historic visit of the Mongolian President Elbegdorj Tsakhia to Pyongyang, the two countries signed an economic package which included the utilization of North Korea’s Rajin port. The Rajin Port is located in the Rason Special Economic Zone and serves as a strategic access that could unlock Mongolia’s landlocked position, generating a cold-water maritime outlet. By utilizing the port, Mongolia will be able to diversify its ports and not solely depend on China’s port of Tianjin.

Moreover, Mongolia has the potential to export coal to North Korea. Given the current geopolitical environment where both Russia and China are seeking opportunities with North Korea, Mongolia’s position is equally crucial.

The Rajin port discussion began back in the 1990s, with the backing of the United Nations under the Greater Tumen Initiative (GTI), and has been an economic pillar between Mongolia and North Korea despite changes of leadership.

During this year’s Ulaanbaatar Dialogue on Northeast Asian Security, which took place on June 5, South Korean Unification Minister Chung Dong-young made a special address on the on “The Path to Peaceful Coexistence on the Korean Peninsula and Common Prosperity in Northeast Asia.” Chung met with Mongolian President Khurelsukh Ukhnaa and called for Mongolia’s support in advancing peace in the Korean Peninsula. 

Moreover, in an effort to include North Korea in the changing geopolitical scene in Northeast Asia, Chung called for Pyongyang’s active participation in the security dialogues and the Tumen River development. 

The Tumen River development project, in essence, involves a deeper cooperation of regional actors on the Arctic Sea Route and developing regional connectivity between the proposed Seoul-Beijing high-speed rail link, and the Trans-Siberian Railway, the Trans-China Railway, and the Trans-Mongolian Railway systems. 

These initiatives highlight the geopolitical shift in Northeast Asia and the emergence of partnerships that can create new diplomatic channels and economic engagement for regional actors. North Korea, with the support of Russia and China, as well as increasingly Southeast Asian and Eastern European actors, will continue to aim to function as a somewhat normal state despite the protracted discussions on nuclearization and governance. 

In addition, Chinese President Xi Jinping’s recent state visit to Pyongyang further demonstrates a deepening of regional cooperation and improved mechanisms. In early  May, Russian President Vladimir Putin paid a state visit to China, with the hope of reassuring the rest of the world that Moscow and Beijing’s relations remain strong and will continue to be. The Russia-China Joint Declaration recognized the shifts and transformations in the post-WWII international order and that both Moscow and Beijing will, while adhering to certain principles, seek new partnerships and engage the world. 

Aligning with Mongolia’s strategic interest and its efforts in diversifying opportunities with regional connectivity, there is another major project at hand, which involves the Moscow-Ulaanbaatar-Beijing trilateral mechanism. 

The Power of Siberia 2 is a major trilateral development that Ulaanbaatar cannot miss and hopes to launch with its only two neighbors. With the ongoing war in Ukraine and China’s hesitancy to finalize the details and the terms of the project, the Power of Siberia 2 has been slow to progress. At the same time, while the implementation of the Power of Siberia 2 is in the interest of Mongolia’s economic and regional connectivity ambitions, with the general outlook for geopolitical instability, Ulaanbaatar, too, may not be keen to rush into major commitments. 

From Northeast Asia’s geopolitical point of view, there are notable changes and pending opportunities. Particularly to a landlocked, small economy like Mongolia, strategic stability and diplomatic resilience go hand-in-hand. To Ulaanbaatar’s diplomatic strength, Mongolia maintains its position as a trustworthy partner and actor, but with new opportunities emerging on the horizon, Ulaanbaatar must navigate even more strategically. While both Power of Siberia 2 and the utilization of North Korea’s Rajin port are gateways to Mongolia’s economic goals, these will likely take time and depend on many factors that will not only involve international relations of Russia, China, and North Korea, but also the United States, South Korea, and how the international community views the emerging geopolitical reality.

by Bolor Lkhaajav:
Bolor Lkhaajav is a researcher specializing in Mongolia, China, Russia, Japan, East Asia, and the Americas. She holds an M.A. in Asia-Pacific Studies from the University of San Francisco.

Mongolian farmers are concerned about the prospect of grain imports from the EAEU www.logos-pres.md

Mongolia has signed an interim trade agreement with the EAEU, which will take effect in July 2026. One of the consequences for the country is a reduction in customs duties on grain. Cheaper imported grain will enter the Mongolian market from Russia and Kazakhstan—countries that practice agriculture on a continental scale with industrial efficiency.

MongolianNews has expressed concern over this issue. The situation in Mongolia’s grain market could become a serious problem for local farmers who are unprepared for such a challenge, according to Central Fsia.media. 

Of Mongolia’s 1.27 million hectares of arable land, half is cultivated partly thanks to a crop rotation system with fallow periods. In the western mountainous region, 82% of agricultural land remains uncultivated. In response to this structural inefficiency, the government has concentrated more resources in the central region, which already produces the vast majority of the country’s grain, while the rest of the country’s agricultural land remains unused.
This centralization has long been a known vulnerability. 

Currently, the Mongolian agricultural sector is already undergoing massive structural changes due to a sharp increase in imports of cheap Russian wheat, devastating droughts within the country, and new free trade frameworks.

Russian wheat exports to Mongolia during the 2025/2026 marketing season have increased 5.5-fold compared to the same period last year, reaching 94,000 tons. According to forecasts by the U.S. Department of Agriculture (USDA), total grain imports to Mongolia this season will double, reaching 255,000 tons.

KT Partners with Mongolia's TDB and Woori Bank for Foreigner-Focused Telecom, Finance Services www.en.sedaily.com

Woori Bank has signed a memorandum of understanding (MOU) with the Trade and Development Bank of Mongolia and KT to provide specialized financial and telecommunications services for foreigners, the bank said.

Through the agreement, the three companies will offer integrated financial and telecommunications services to Mongolian nationals working or studying in Korea, covering everything from before their arrival to settling into life in the country.

Specifically, when customers use the Trade and Development Bank in Mongolia, they will receive preferential benefits on loans and deposits if they commit to subscribing to Woori Bank's overseas remittance service and KT's telecommunications network.

After arriving in Korea, Woori Bank will help them open remittance accounts through its specialized branches for foreigners and Sunday-operating branches, and provide preferential benefits on exchange rates and overseas remittance fees.

KT will apply its lowest-priced mobile telecommunications plan and link the telecommunications bill payment account to Woori Bank.

Mongolia and South Korea launch strategic dialogue on cooperation in critical minerals www.akipress.com

AKIPRESS.COM - Korea and Mongolia have launched a vice ministerial-level strategic dialogue this week aimed at expanding cooperation in critical minerals, supply chains and other strategic sectors, Yonhap reports, citing the Korean Foreign Ministry.

First Vice Foreign Minister Park Yoon-joo held the inaugural session of the bilateral strategic dialogue with his Mongolian counterpart, Gombosuren Amartuvsuin, in Ulaanbaatar on Monday, where the two sides discussed ways to advance cooperation in key sectors.

Park called for closer collaboration in areas with direct benefits for both countries, including rare metals, critical minerals, supply chains and healthcare, as well as cooperation on international issues.

Amartuvsuin expressed hope that the new dialogue framework can help the potential of mutually beneficial cooperation translate into tangible outcomes, while expanding future-oriented collaboration in fields such as green technology and artificial intelligence (AI).

The two sides also exchanged views on developments on the Korean Peninsula and agreed to continue working together to promote peace and stability in the region.

National Firms to Jointly Mine Borteeg Coal Deposit montsame.mn

Ulaanbaatar, June 10, 2026 /MONTSAME/. MONTSAME National News Agency, in cooperation with MICC Mongolia International Capital Corporation LLC, is delivering a weekly overview of domestic and international capital markets and economic developments to its readers.

Weekly Capital Market and Economic Review (June 2–June 8, 2026)

MONGOLIAN STOCK EXCHANGE

A total of 5.6 million securities worth MNT 11.54 billion were traded on the Mongolian Stock Exchange over the past week. In terms of trading value, leading companies included MGL Aqua JSC, MIC Holding JSC, Khan Bank JSC, Invescore NBFI JSC, and Trade and Development Bank JSC. During this period, three block trades were executed, specifically:

• 2.9 million shares of MGL Aqua JSC (MGLA) at MNT 250 per share, totaling MNT 749 million;
• 45.4 thousand shares of Invescore NBFI JSC (INV) at MNT 8,000 per share, totaling MNT 363.9 million;
• 55.1 thousand shares of MIC Holding JSC (MIK) at MNT 1,275 per share, totaling MNT 725.7 million.

All major indices of the Mongolian Stock Exchange closed lower last week, while overall market conditions remained relatively stable. The TOP-20 Index declined by 0.02% to 51,347.33 points. The MSE A Index fell by 0.80% to 19,565.06 points, indicating reduced trading activity in high-cap stocks. Meanwhile, the MSE B Index recorded the largest drop, falling by 0.91% to 14,196.18 points, reflecting relatively weak movement among smaller-cap stocks. Overall, the decline was evenly distributed across all market segments.

EFFORTS INTENSIFY TO BRING BORTEEG COAL DEPOSIT INTO ECONOMIC CIRCULATION

The Government of Mongolia has set a target to bring the Bortee coal deposit into economic circulation starting in 2026, with plans to mine 15 million tonnes of coal annually and export 10 million tonnes. The deposit contains total reserves of 424 million tonnes, of which 95% is weakly coking coal and 5% is thermal coal.

As part of the project, the government has conducted an open selection process for foreign investors, aiming to generate an additional USD 1 billion in revenue. As a result, Erdenes Tavan Tolgoi JSC submitted the highest-rated proposal and will manage the deposit while conducting extraction in cooperation with domestic enterprises.

Under the contract terms, Mongolia’s share of the benefits is estimated at 70%, with the possibility of receiving a total advance payment of USD 1 billion within the first five years.

Among other bidders, China’s Baowu Resources offered a USD 600 million advance payment with a 51.7% share, while China Energy Materials & Technology Xuzhou proposed a USD 1 billion advance but with a 51% share for Mongolia.

However, attention is drawn to Mongolia’s prior long-term coal supply agreement with China, under which the country is obligated to supply coal at discounted prices for 16 years. As a result, despite a state-owned company winning the tender, there remains a risk that the actual economic benefits of the deposit may be reduced, while the Chinese side could retain a more advantageous economic position.

FROM RAW MATERIALS TO FINAL PRODUCTS: WHAT CHANGES WILL THE “WHITE GOLD” PROGRAM BRING TO LIGHT INDUSTRY?

One of the major weaknesses of Mongolia’s economy is its heavy reliance on the mining sector. Mining accounts for around 70% of industrial output, while 86% of exports are directed to China. In other words, any decline in Chinese demand or global commodity prices directly shocks the Mongolian economy. To address this vulnerability, developing other sectors has become essential—among them, the cashmere industry stands out as a highly promising solution.

Although Mongolia is among the world’s leading suppliers of wool and cashmere, it does not fully capitalize on this resource. Agriculture contributes only about 10% of GDP, and despite overall economic growth of 7% last year, the sector itself contracted by 8.9%. Foreign investment in agriculture remains extremely low, totaling just USD 1.2 million in 2023.

While 95% of agricultural exports consist of cashmere, only 25% is processed domestically, with the remaining 75% exported as raw material. As a result, profits from value-added products remain minimal. Estimates suggest that fully processing these raw materials domestically could generate up to USD 1.5 billion in additional annual revenue.

The “White Gold” national program is designed to address these shortcomings. With a budget of MNT 2.2 trillion over three years, it aims to:

• Increase domestic processing from 20% to 40%;
• Boost cashmere exports from USD 398 million to USD 690 million;
• Expand total production from MNT 1.5 trillion to MNT 2.3 trillion.
 
The program is also expected to create over 8,200 new jobs, marking a significant transformation for the sector.

However, a key concern remains whether the program will effectively reach its target beneficiaries. While 31.2% of the funding will come from the state budget, the remainder is planned to be financed through bank loans—potentially limiting access for small and medium-sized enterprises.

Urin.N

Mongolia Hosts International Pasture Management Dialogue Ahead of COP17 www.montsame.mn

Ulaanbaatar, June 10, 2026 /MONTSAME/. An international policy dialogue titled “Reforming Rangeland Governance Through Stakeholder Participation” opened on June 9 in Ulaanbaatar.

The meeting has brought together representatives of government agencies, civil society organizations, and herders from 13 countries across Central Asia, South Asia, East Africa, West Africa, Europe, the Middle East, and North Africa in addition to Mongolia. Participants are discussing responses to climate change, sharing good practices in inclusive and participatory sustainable rangeland management, highlighting the role of pastoralists in climate adaptation and biodiversity conservation, and exploring opportunities for expanding interregional cooperation.

Organizers noted that the dialogue is taking place at a critical time for the world's rangelands and pastoral communities. An estimated 500 million pastoralists worldwide depend on livestock herding across lands covering more than 40% of the Earth's surface. Rangelands represent the world's largest terrestrial ecosystem, and their sustainable management is essential for climate resilience, biodiversity conservation, and food security.

Javkhlan Bayarsaikhan, Advisor to the President of Mongolia on Civil Society Policy and Program Coordination, said, “This year, Mongolia is preparing to host the 17th session of the Conference of the Parties to the United Nations Convention to Combat Desertification (COP17) at the initiative of the Government of Mongolia. In addition, the United Nations General Assembly proclaimed the International Year of Rangelands and Pastoralists at Mongolia's initiative, and today's event is being organized within that framework.

“The Office of the President has also established the National Green Platform. Through this platform, we receive, select, and support projects aimed at improving rangeland management and the sustainable use of natural resources. Professional organizations provide free technical advice and assistance to improve these projects".

“To date, 135 projects have been submitted, and 15 have been selected. We plan to present them to international investors during COP17 and develop the platform into a mechanism for attracting investment".

“These initiatives not only support domestic policy implementation but also create important opportunities to strengthen Mongolia's policy influence on the international stage and attract investment.”

Altantuya Ts., President of the National Association of Agricultural Cooperatives, said, “Mongolia's experience demonstrates that rangeland governance can be strengthened when herders, government institutions, and civil society work together. This dialogue provides an opportunity to share solutions, strengthen partnerships, and advance policies that support pastoralism.
” She added, “Mongolia has implemented numerous initiatives and projects aimed at improving rangeland management and governance, and tangible results are beginning to emerge. One positive progress is that more herders are trying to keep livestock numbers at levels compatible with the carrying capacity of pastures. However, this must be achieved without reducing herders' livelihoods and incomes. For this reason, projects are focusing on improving the quality and productivity of livestock products and developing value-added supply chains.”

Munkhnasan Ts., an expert at the Ministry of Food, Agriculture, and Light Industry, said, “Our ministry is actively pursuing legal reforms to improve rangeland governance and strengthen institutional capacity so that Mongolia can take a leadership role internationally.
“As part of COP17, which Mongolia will host in August, we plan to present three declarations prepared by pastoral communities: the Herders' Declaration, the Young Herders' Declaration, and the Women Herders' Declaration. This discussion is intended to gather comments and feedback on the initial drafts of these documents.”
He also noted: “Approximately 73 percent of Mongolia's territory consists of pastureland and hayfields. Research indicates that around 70 percent of the country's pastureland has experienced some degree of degradation. Therefore, reducing pasture degradation and improving pasture use have become urgent priorities.
“To achieve this goal, the time has come to introduce economic, business, trade, market, and management instruments. The most effective solution is to reduce grazing pressure by increasing herders' incomes, improving the utilization of livestock-derived products, and strengthening supply chains.

“A key policy objective is to bring all livestock-derived raw materials—including hides, wool, cashmere, and by-products—into the economic cycle and ensure that the resulting benefits reach herders directly.”

Maamankhuu S., a herder from Khanbogd soum of Umnugobi aimag, said, “I have been herding livestock for 60 years and have experienced both the rewards and hardships of pastoral life. Over the years, I have also participated in activities organized by international organizations and gained considerable experience.
“Recently, people have been saying that there are almost no young herders left in Mongolia. In reality, young herders do exist, but their voices are rarely heard and often remain invisible. Some university graduates are returning to rural areas and taking up herding, yet their achievements receive little public attention. Their work and contributions deserve greater recognition.

“For example, some young herders milk up to 100 camels a day, producing 50 to 60 liters of milk and earning MNT 500,000 to 600,000 daily. There are many successful examples like this, but they often go unnoticed and unsupported".

“Therefore, we need to highlight and promote the achievements of educated young people who choose to work in rural communities. The upcoming COP17 conference in Mongolia will provide an important opportunity to showcase Mongolia's livestock sector internationally, exchange experiences, and share practical success stories.”

The dialogue is jointly organized by the Ministry of Food, Agriculture, and Light Industry, the International Land Coalition (ILC), the National Land Coalition of Mongolia (NLC), and the Food and Agriculture Organization of the United Nations (FAO). It forms part of the International Year of Rangelands and Pastoralists and the International Land Coalition's “Pastoralism Matters” campaign.

Organizers aim to produce concrete policy recommendations that will directly contribute to discussions at COP17.
The main sessions of the meeting are being held at Millennium Plaza Hotel in Ulaanbaatar from June 9 to 11. Activities showcasing Mongolia's nomadic heritage and traditional way of life to international guests are scheduled to take place in Bornuur soum, Tuv aimag, from June 11 to 13.

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Foreign Trade Turnover Reaches USD 13.4 Billion www.montsame.mn

Ulaanbaatar, June 10, 2026 /MONTSAME/. Mongolia traded with 145 countries during the first five months of 2026, with total foreign trade turnover reaching USD 13.4 billion, according to the National Statistics Office. Exports amounted to USD 8.5 billion, while imports totaled USD 4.9 billion, resulting in a trade surplus of USD 3.6 billion.

Compared to the same period last year, total trade turnover increased by 34.6% (USD 3.4 billion), exports rose by 56.9% (USD 3.1 billion), and imports grew by 8.1% (USD 367.5 million). The trade surplus expanded more than fourfold.

The growth in exports was mainly driven by higher shipments of copper concentrate, coal, gold, and lead concentrate. Copper concentrate and gold accounted for 49.7% of total exports, up 23 percentage points from a year earlier.

Mineral products, precious stones and metals, jewelry, and textiles made up 97.6% of total exports. China remained Mongolia's largest export destination, receiving most of the country's coal and copper concentrate exports, while nearly all exports to Switzerland consisted of unprocessed and semi-processed gold.

On the import side, increases were recorded in diesel fuel, gasoline, tires, and iron structures and components. Mineral products, machinery and equipment, electrical goods, vehicles and parts, and base metal products accounted for 71.9% of total imports.

China supplied 38.8% of Mongolia's imports, followed by Russia (29.7%), Japan (8.7%), the Republic of Korea (3.7%), the United States (3.3%), and Germany (2.1%), together accounting for 86.3% of total imports.

During the reporting period, gasoline imports reached 450,000 tonnes, up 36.2% year-on-year, while diesel fuel imports increased 15.5% to 820,300 tonnes. Gashuunsukhait and Zamiin-Uud ports handled 74.2% of Mongolia's total exports.

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Construction Sector Creates Over 100,000 Jobs as of 2025 www.montsame.mn

President Khurelsukh Ukhnaa met with representatives of the urban development, construction, housing, and public utilities sectors. The President congratulated generations of employees and professionals in the construction sector on the historic 100th anniversary of the establishment and development of Mongolia's construction industry, noting the sector's significant contribution to economic growth, social development, and the improvement of living standards.

During the meeting, President Khurelsukh briefed participants on the work carried out since assuming office, the implementation of national movements, campaigns and programs, Mongolia’s foreign relations, and the country’s current socio-economic situation.

According to official figures, construction and major renovation works reached MNT 11.7 trillion by the end of 2025, accounting for approximately 3.5% of Mongolia’s GDP.

Minister of Urban Development, Construction, and Housing Bat-Amgalan Enkhtaivan said the ministry aims to introduce legal reforms, optimize the sector's institutional framework, introduce advanced technologies, strengthen links between research and industry, increase investment, and improve construction standards and regulations.

Draft revised laws on Construction, Urban Development, and Housing, along with a draft law on a specialized housing bank, are being prepared for submission to Parliament.

More than 100,000 jobs had been created in the construction sector as of 2025. However, challenges including overloaded infrastructure and public services, air, water, and soil pollution, traffic congestion, and limited access to public services continue to undermine citizens' living conditions and their right to live in a healthy and safe environment.

To address population concentration and create new settlement centers, President Khurelsukh issued a decree to establish the new city of Kharkhorum in the Orkhon Valley, a project that is being implemented in phases.

Moreover, during his tenure as Prime Minister, several major development projects were launched and commissioned, including the 1,008-unit Nogoon Nuur housing project, the Solongo 1 and Solongo 2 residential developments comprising 5,002 apartments, as well as a water purification plant, a wastewater recycling plant, and a wastewater treatment facility.

World Horse Day Main Events Set for July 13 at Khui Doloon Khudag www.montsame.mn

Mongolia is set to celebrate “World Horse Day” on July 11-13, 2026, in cooperation with the countries that co-sponsored the United Nations resolution establishing the observance.

The celebration aims to promote horse culture, traditions, and the valuable heritage of nomadic civilizations worldwide. Guests and delegations from 56 countries are expected to gather in Mongolia to participate in a series of ceremonial, academic, cultural, artistic, and sporting events dedicated to equine heritage, including a parade of 10,000 horse riders.

The main events of “World Horse Day” will take place on July 13 at Khui Doloon Khudag, near Ulaanbaatar. Preparations are underway, including the development of power supply systems, engineering infrastructure, and site improvements.

The 79th Session of the United Nations General Assembly discussed and adopted the draft Resolution on Proclaiming July 11 “World Horse Day,” initiated by President of Mongolia Khurelsukh Ukhnaa, on June 3, 2025. The resolution was co-sponsored by 56 countries and recognizes the historical and contemporary contributions of horses to human civilization. The resolution also calls for the preservation of equine heritage, pasturelands, and nomadic pastoral traditions.  

Japan, Mongolia agree to advance strategic partnership www.japantoday.com/

Japan agreed with Mongolia on Tuesday to further strengthen its "special strategic partnership" to promote peace and prosperity in the region.

Foreign Minister Toshimitsu Motegi thanked his visiting counterpart, Batmunkh Battsetseg, in Tokyo for Mongolia's understanding and cooperation on the long-standing issue of North Korea's past abductions of Japanese nationals, according to Japan's Foreign Ministry.

At the outset of the meeting, Motegi said Japan hopes to work closely with Mongolia, a strategically important landlocked nation between China and Russia

He also expressed Japan's willingness to assist in the expansion of Chinggis Khaan International Airport, seen as key to improving connectivity.

Battsetseg thanked Japan for its support, and the two ministers agreed to hold a vice minister-level strategic dialogue at an early date.