Change of His Majesty’s Ambassador to Mongolia: Edwin Samuel www.gov.uk

Beyond Aid and Trade: Japan, Mongolia, and the Critical Minerals Opening www.csis.org

Japan is widely hailed as a model for supply chain resilience in rare earth elements (REEs), leading advanced economies in research and development (R&D) investment as a percentage of GDP and other long-term efforts to “de-Chinafy” its REE supply chain. Following Beijing’s 2010 export restrictions in response to the Senkaku/Diaoyu fishing boat incident, Tokyo launched a multifaceted strategy to diversify its supply sources, including investments in overseas mining projects. In 2025, Japan sourced 66 percent of its REEs from China, down from 93 percent in 2009.

However, China’s recent export restrictions on dual-use items, including REEs and other critical minerals, following Prime Minister Takaichi’s comments on a Taiwan contingency, have renewed concerns and prompted the Japanese government to redouble diversification efforts across REE and critical minerals supply chains. Tokyo has advanced key initiatives overseas that go beyond purchasing raw materials to building new processing capacity outside China, which currently controls 90 percent of global capacity. As Japan searches for new collaborators in critical minerals, its technological and financing capabilities may be a well-suited match for the resource endowment of Mongolia, a longtime but underutilized economic partner.

Mongolia's Resource Landscape and the Processing Gap
Mongolia holds an estimated $1–3 trillion in untapped mineral reserves, including significant deposits of copper, fluorspar, coal, and REEs. The challenge is not access to deposits but the absence of domestic processing capacity. Approximately 88 percent of Mongolian minerals leave the country unprocessed, with the vast majority bound for China. This pattern highlights the primary choke point in global REE supply chains, where limited mid- and downstream capacity creates structural dependence on countries better equipped with the vital infrastructure and technological know-how.

Mongolia's "Third Neighbor Policy" prioritizes greater economic and diplomatic ties with developed democracies to achieve strategic autonomy from its immediate neighbors of China and Russia. Redirecting exports to alternative buyers is a meaningful but insufficient step in this endeavor. Attracting investment and technology transfer in REE processing and refining from partners such as Japan is essential for Mongolia to capture more value, as processed and refined minerals command substantially higher prices than raw ore. Over time, this momentum may help expand Mongolia’s largely mining-based economy into artificial intelligence, clean energy, defense, and other downstream strategic sectors.

Existing Japan–Mongolia Frameworks
Japan has long been Mongolia's largest bilateral aid donor and became its first Economic Partnership Agreement counterpart in 2016. Tokyo supports Mongolia through soft loans and technical assistance via the Japan International Cooperation Agency (JICA), and in 2022, the two governments upgraded ties to a "Special Strategic Partnership for Peace and Security". The 2022–2031 Action Plan underpinning this partnership explicitly commits both sides to "cooperation to ensure a long-term, stable supply of Mongolian copper, REEs, and other mineral resources to Japan, and cooperation to revitalize the supply chain."

The institutional foundation is thus well-established for cooperation in new domains, including processing and refining REEs and other critical minerals. A 2016–2022 JICA capacity-building project on Mongolia's mining sector generated baseline recommendations for scaling up midstream capabilities, but has not yet produced concrete commercial deals or infrastructure projects. 

The Japan–Mongolia Opening and Structural Challenges
In the long term, resilient REE and critical minerals supply chains require upstream exploration and extraction, as well as midstream processing and refining, before reaching downstream markets. Mongolia possesses the former in abundance; Japan has a strident advantage in the latter through its magnet, chemical, and materials industries. Japan has already seen success in developing processing facilities overseas through loans and equity stakes, as demonstrated most prominently in the Japan Organization for Metals and Energy Security (JOGMEC)-led operations in Malaysia that separate REE oxides for Japanese manufacturing use. Through JOGMEC and related entities, Japan is cultivating overseas processing hubs, opening the door for Mongolia to host high-value facilities using its domestic mineral resources and Japanese expertise. 

Any expansion of Japanese investment in Mongolian mineral processing would face real barriers. Under Mongolia's Constitution and Land Law, foreign nationals and majority foreign-owned companies cannot freely transfer, collateralize, or sell land-use rights, even though they may obtain such rights, complicating the financing and structuring of large-scale processing facilities. As a landlocked country, Mongolia’s dependence on air and overland routes through China and Russia presents unavoidable logistical constraints, compounded by the risk of economic retaliation or coercion from its largest trading partner if it shifts closer to Japan. In this complex legal and geopolitical landscape, Japan's existing EPA and JICA frameworks may offer pathways unavailable to purely commercial investors. Converting these institutional advantages into tangible projects, however, will remain a key challenge.

A Broader Minilateral Context
Japan’s efforts in this space complement those by the United States, which has engaged in various dialogues, memoranda of understanding (MOUs), and partnerships with Mongolia aimed at promoting secure and resilient critical minerals supply chains in the Indo-Pacific. Mongolia is geographically proximate to both Japan's industrial base and existing supply routes, holds significant untapped deposits, and already has formal partnership frameworks with both Tokyo and Washington. Therefore, Mongolia could be integrated into U.S.–Japan bilateral initiatives, particularly those focused on identifying and investing in prospective processing and refining hubs. Some examples include the 2025 Framework For Securing the Supply of Critical Minerals and Rare Earths, the 2026 Action Plan on Critical Minerals to develop strategic trade policies and border mechanisms to mitigate supply chain vulnerabilities, and public–private partnerships such as JOGMEC’s MOU with U.S. firm REAlloys to develop REE processing technologies and build joint supply chains. 

Existing minilateral frameworks also present avenues for activating Japan–Mongolia cooperation. Mongolia recently attended the 2026 Critical Minerals Ministerial hosted by the United States, which saw the launch of the Forum on Resource Geostrategic Engagement (FORGE), the successor to the Minerals Security Partnership, to which Japan is a signatory. Mongolia and Japan could leverage coordination tools offered by forums such as FORGE to align policies and manage cross-border projects. These pathways suggest that Mongolia is not merely a passive supplier of raw materials but a plausible partner in emerging minilateral critical minerals architectures. 

Looking Ahead
As Japan pursues further diversification and resilience in its critical minerals supply chains and Mongolia seeks to move up the value chain, the two countries' complementary strengths and existing institutional frameworks suggest that deeper cooperation is a logical next step. Whether Tokyo and Ulaanbaatar move to activate these frameworks in the near term will depend on political will, structural feasibility, and commercial viability—questions that the robust bilateral relationship is well positioned to address.

State Budget Revenue Rises by MNT 1.2 Trillion in First Four Months of 2026 www.montsame.mn

Mongolia’s consolidated state budget revenue and grants reached MNT 10.2 trillion in the preliminary results for the first four months of 2026, according to the National Statistics Office of Mongolia. The figure represents an increase of 13.8%, or MNT 1.2 trillion, compared with the same period last year.

During the period, balanced revenue and grants totalled MNT 8.9 trillion, up 5.4% year-on-year, equivalent to an increase of MNT 459.7 billion.

Total expenditure and net lending reached MNT 10.4 trillion, resulting in a balanced budget deficit of MNT 1.4 trillion.

Tax revenue amounted to MNT 8.3 trillion in the first four months of the year, increasing by 4.3%, or MNT 344.5 billion, from the previous year. The growth was primarily driven by a 17.6% rise in social insurance revenue, equivalent to MNT 290.1 billion, and a 5.8% increase in value-added tax revenue, equivalent to MNT 105.8 billion.

Meanwhile, income tax revenue declined by 5.7%, or MNT 148.7 billion, while excise tax revenue decreased by 28.6%, or MNT 108.3 billion.

Of the total tax revenue, 29.9% was generated from income tax, 23.4% from value-added tax, 23.4% from social insurance contributions, 7.3% from foreign trade-related taxes, 3.3% from excise taxes, and 12.7% from other taxes, fees, and charges.

Mongolia Promotes Energy, Financial Sector Cooperation in Tokyo www.montsame.mn

Mongolia’s energy sector, investment climate, ongoing projects and programs, and opportunities for bilateral cooperation were presented during the “Invest Mongolia: Energy and Financial Sector, Tokyo 2026” forum held in Tokyo.

According to the Government Media and Public Relations Department, discussions during the forum focused on expanding economic cooperation between Mongolia and Japan. More than 240 Japanese government agencies, private-sector organizations, and investors participated in the event, while 14 Mongolian private-sector entities presented their projects and programs. Participants also exchanged views on building business networks and exploring potential areas of cooperation.

The forum also featured discussions on renewable energy, energy transition, green financing, and sustainable investment, identifying new opportunities for cooperation and pathways toward practical partnerships.

The event, which aimed to increase investment in Mongolia, strengthen public-private partnerships, and expand international and economic cooperation, was attended by Mongolia’s Deputy Prime Minister Dorjkhand Togmid, Minister of Energy Naidalaa Badrakh, as well as representatives from the Deputy Prime Minister’s Office, the Ministry of Energy, the Investment and Trade Agency, Bank of Mongolia, the Financial Regulatory Commission, and the Embassy of Mongolia in Japan.

Foreign Minister Receives Delegation from U.S. Millennium Challenge Corporation www.montsame.mn

Minister of Foreign Affairs Battsetseg Batmunkh received a delegation led by Dan Petrie, Acting Chief of Staff of the U.S. Millennium Challenge Corporation, on May 14.

During the meeting, Minister Battsetseg emphasized that Mongolia–United States relations and cooperation are expanding and developing across many sectors under the framework of the Strategic Third Neighbor Partnership, while also gaining tangible economic substance. She noted that the MCC Water Compact serves as a symbol of practical and effective cooperation between the two countries and expressed satisfaction that the project is addressing the critical issue of water supply in Ulaanbaatar.

The minister also expressed special gratitude to the leadership and staff of the Millennium Challenge Corporation for their support in ensuring that the Wastewater Recycling Plant and the Advanced Water Purification Plant are constructed and commissioned on schedule and within the approved budget. The sides further exchanged views on the possibility of establishing a third Compact agreement between Mongolia and the United States.

Dan Petrie expressed appreciation to Mongolia’s Ministry of Foreign Affairs for its close cooperation and comprehensive support in implementing the Water Compact and affirmed the MCC’s commitment to continued collaboration on future projects and programs, according to the Ministry of Foreign Affairs.

Honorary Consuls of Mongolia Appointed in the U.S. States of Minnesota and Utah www.montsame.mn

Ambassador of Mongolia to the United States, Batbayar Ulziidelger, presented copies of the patents of appointment to Enkhbileg Tserenbat as Honorary Consul of Mongolia in the State of Minnesota and to Raymond Richard Price as Honorary Consul of Mongolia in the State of Utah.

On this occasion, Ambassador Batbayar emphasized that the newly appointed Honorary Consuls should focus on expanding Mongolia–United States trade and economic cooperation, supporting collaboration in tourism and education, promoting Mongolia, and paying particular attention to protecting the rights and legitimate interests of Mongolian citizens residing in the State of Minnesota, according to the Embassy of Mongolia in the United States.

Honorary Consuls of Mongolia abroad are not career diplomatic officers. They are typically respected individuals permanently residing in the host country who hold strong reputations in business, social, and public spheres within their designated jurisdictions. Acting voluntarily without financial support from the Government of Mongolia, they contribute to strengthening friendly relations and cooperation between the two countries.

In addition to representing Mongolia in their respective regions, Honorary Consuls provide information and guidance to Mongolian citizens residing within their jurisdictions, facilitate communication with the Embassy when necessary, and offer assistance during emergencies. They also work to connect business communities of the two countries, support investment promotion, expand cooperation in trade, economy, and tourism, and organize cultural, educational, and sports activities.

China, Mongolia to hold joint army training www.xinhuanet.com

China and Mongolia will carry out joint army training "Steppe Partner 2026" in north China's Inner Mongolia from late May to early June, a Chinese defense spokesperson said on Monday.

Jiang Bin, spokesperson for the Ministry of National Defense, told a regular press conference that the training will focus on joint strikes against illegal armed groups.

This joint training will be the second of its kind, with the goal of continuously deepening friendship and mutual trust, enhancing practical cooperation, and strengthening both sides' capabilities to jointly uphold regional peace and stability, according to Jiang.

(Web editor: Zhang Kaiwei, Liang Jun)

TMK taps local LPG giant in new Mongolian gas-to-power deal www.smh.com.au

TMK Energy has flicked the switch on a new phase of its Mongolian gas development, signing a partnering agreement with the country’s biggest LPG distributor to build a gas-to-power plant. The deal brings the company a step closer to commercial gas sales from its sprawling Gurvantes XXXV coal-seam gas project.

The company’s flagship gas asset spans 8400 square kilometres in Mongolia’s South Gobi Basin, less than 20 kilometres from the Chinese border and close to established northern Chinese gas infrastructure. The basin-scale project hosts thick bituminous coal seams stretching more than 150 kilometres across strike and holds a contingent resource of 1.2 trillion cubic feet of gas (Tcf).

The company has struck a memorandum of understanding with Dashvaanjil Group to develop an initial 1-megawatt modular power plant beside the Gurvantes XXXV pilot project. The plant will run on gas already flowing from TMK’s pilot wells and be backed by Dashvaanjil’s LPG supply as a dual-fuel setup during the ramp-up phase.

Engineering and design work has already kicked off, with Dashvaanjil undertaking downstream engineering studies at its own cost and risk while TMK handles upstream field integration, gas gathering and field works. Produced gas from the pilot wells will be commingled at a central collection point, where it can be conditioned, if required, before feeding the gas-fired power unit.

‘This is another milestone agreement, a major step forward in advancing our pathway for future commercial gas sales.’
TMK Energy chief executive officer Dougal Ferguson
The partners are targeting completion of engineering by the end of the June quarter next year, with commissioning and first power generation slated for the end of the September quarter 2027. Once the engineering phase is complete, the parties can elect to move into formal commercial agreements, locking in the project structure and outlining how investment returns will be shared between both sides.

TMK says Dashvaanjil brings a strong operational safety culture, deep infrastructure reach and technical expertise to the project, positioning the partnership as a fast and cost-effective proof-of-concept step towards future commercial gas sales.

The power plant will initially provide the company with a reliable long-term electricity source for its own pilot operations, reducing reliance on intermittent regional grid supply. The setup will also be backed by Dashvaanjil’s LPG supply and TMK’s existing grid connection to help secure uninterrupted field operations as gas production continues to build.

Notably, the project has been designed as a scalable platform rather than a standalone pilot. Excess electricity generated beyond TMK’s operational needs is expected to be sold to local industrial customers, likely nearby coal mining operations in the South Gobi region, where energy demand continues to rise.

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TMK Energy chief executive officer Dougal Ferguson said: “The Power Project will be designed to provide TMK with a reliable long-term power solution for its Pilot Well Project, while also demonstrating the broader potential for natural gas to contribute to other domestic energy users.”

The agreement follows TMK’s recent push to accelerate gas sales after securing regulatory backing to use pilot gas for on-site power generation.

Operational momentum has also continued building across the field. Seven pilot wells are now producing gas, with the company recently reporting April output had climbed to 663 cubic metres per day. That flow represents the project’s second-highest monthly production rate to date, with management steadily ramping up reservoir dewatering and pilot production activities.

Recent reservoir work has also confirmed pressure communication between wells, supporting TMK’s broader reservoir connectivity model and strengthening confidence in scalability. The company is preparing to drill additional pilot wells later this year alongside farm-out discussions aimed at bringing in strategic partners across upstream, midstream and downstream infrastructure.

Mongolia’s broader energy backdrop appears increasingly supportive. The country remains heavily dependent on coal-fired power and on imported electricity from China, while industrial expansion across the South Gobi continues to lift demand for stable domestic energy supplies.

With flare stacks now flickering across the South Gobi pilot wells, TMK’s story is shifting from proving up gas resources to building a practical, scalable and potentially pivotal domestic power play for Mongolia’s energy future.

N.Uchral: Mayor Kh.Nyambaatar dismissed from his post www.gogo.mn

On May 16, 2026, Prime Minister N.Uchral visited the “Khuchit Shonkhor” meat market, in connection with rising meat prices. Following the visit, he announced that Mayor Kh.Nyambaatar had been dismissed from his post effective immediately.

Prime Minister N.Uchral said, “Theft and corruption have gone too far. Projects and tenders have been stolen. Now it has even affected people’s livelihoods and food. Today, I went to the meat market, and beef is selling for MNT 40,000. Meat prices are being controlled in the countryside, but not in the capital.

Last year, around 8,000 tons of meat were reserved. This year, about 5,000 tons were reserved. Contracts were signed with nine supplier companies and commercial banks. We agreed to sell beef at MNT 15,000 and not increase the price beyond that level, with sales organized at 386 locations.

However, not a single reserve meat supply has arrived at these locations, and I inspected the situation myself today. Where has this meat gone? For example, one citizen purchased 15 tons of meat for MNT 211 million and reserved it. Now even the citizens’ reserve meat is being stolen. What happened to the Tuul Highway project? Finish it. What interests are behind it?

This has caused price increases, and the grounds are clear. Therefore, I am dismissing Mayor Kh.Nyambaatar from his post. I will also establish a special working group together with intelligence and police organizations to investigate all projects, tenders, and activities related to the capital city,” he said.

At the Cannes Film Festival, a presentation of eight Mongolian film projects took place www.open.kg

On May 13, as part of the Cannes Film Festival, one of the most significant film forums in the world, a collection of eight Mongolian film projects was presented. The presentation was held under the auspices of the Mongolian Film Arts Council and was the third of its kind at the festival.

Among the presented projects, special attention is drawn to the following films and series:

the documentary film "For Forty Years We Carried Salt" by director BADRALMAA Batbaatar;

the feature film "Watermelon" by producer TUVSHINSAIKHAN Ganbayar;

the film "Jinjiy's Birthday" directed by TAMIR Bat-Ölziy;

the animated project "Snowball" by producer TAMIR Erdenebayar;

the feature film "Falcon" by producer TEMÜÜJINA Zolbayar;

the feature film "Mirage of the Yellow Steppe" by producer MANDAKHA Gantogso;

the documentary film "Those Who Went to Study in Distant Lands" by director SANCHIR Bulgan;

the TV series project "No Drug 2" by producer ALTANTUYA Tömörbaatar.

Among these films, "Watermelon" stands out, telling the story of a teenager from a remote village in the Gobi Desert. In 1999, a 16-year-old boy tries to grow a watermelon—a promise made to his first love. This impossible task becomes the foundation for his personal growth and self-discovery.

The film was created in collaboration with young director Ganbayar, exploring important themes of adolescence, sexuality, and the experiences of first love.

The event was attended by more than 40 representatives of the international film industry, including producers and investors. Mongolian cinema is traditionally showcased at the Cannes Festival, and one of the most notable achievements was the film "If Only I Could Fall Asleep," which became the first Mongolian film selected for the "Un Certain Regard" program.