Father Costa: The Church in Mongolia is also a ‘laboratory’ of synodality and inculturation www.fides.org

Ulaanbaatar (Fides News Agency) - At the heart of a numerically small (less than 0.1% of the country’s population) yet surprisingly creative Church, the “pastoral week” recently held by the Apostolic Prefecture of Ulaanbaatar offered this year a very concrete workshop on synodality and inculturation, marked by the presence of Father Giacomo Costa, consultant to the General Secretariat of the Synod of Bishops.
Among the week’s most significant moments, the inauguration on 5 May of the Studium, a new research centre on Mongolian language and culture, speaks volumes about how the Catholic Church in Mongolia has, for years, sought to take deep root in the country’s cultural fabric. Promoted by the Apostolic Prefecture, this project is, as the Apostolic Prefect, Cardinal Giorgio Marengo, told Fides, “a hub for cultural research, a physical space, but above all a team of people”. Located next to the cathedral, the Studium will include a space dedicated to a library currently under construction, as well as an office and a meeting room, “where people, particularly members of our team, will be able to meet figures from the world of culture and university professors”. Beneath these rooms there is also a large, fully equipped conference hall, where the inauguration took place. But, the Cardinal insists, the heart of the Studium is not primarily its infrastructure: “We are working on two fronts: the first is to offer a monthly conference, aimed primarily at missionaries, on topics related to Mongolian cultural identity, with a view to providing a program of ongoing formation that enables a better understanding of Mongolian culture and identity from cultural, historical, political, religious and linguistic point of view.”
The other front is that of language: “We wish to provide increasingly accurate translations, and to check and revise the materials we already possess in order to offer linguistic support in the translation of texts useful to the Church,” adds the Cardinal. Through this dual service – formation and linguistic work – the Studium places itself at the centre of a long process of inculturation.
It is in this context, at the intersection of inculturation and synodality, that Father Giacomo Costa’s participation in the Pastoral Week takes place. A Jesuit and theologian involved in the synodal process undertaken by the universal Church, Father Costa is accompanying a theological-pastoral journey in Mongolia that seriously takes the reality of a young Church, composed of faithful from a culture shaped by other religious traditions.

Father Costa, you are accompanying a synodal theological-pastoral journey in Mongolia. How do you perceive this ecclesial reality? What strikes you most?

When you arrive in Mongolia, you really get the impression of entering a different ecclesiastical context. There, Christianity is not merely a minority: it does not represent a shared cultural memory, nor does it form part of society’s everyday symbolic landscape. I was told of a child who, upon entering a chapel for the first time, was frightened by the crucifix and began to cry. It is a very simple episode, but it reveals something profound: there, the cross has not yet become an image tamed by habit. It regains all its strangeness and all its power. In some way, it forces us too to look at it anew.
This has a very concrete consequence for the Church. In Mongolia, one cannot start from implicit assumptions. There is no existing Christian lexicon, no spontaneous familiarity with the Gospel, nor even that set of cultural structures which in Europe continue, at least in part, to support the ecclesial experience even when religious practice weakens. For this reason, the missionary question regains its original radicalism: what does it mean to proclaim Christ to people who have no prior image of Christianity? Where does one really begin? Furthermore, many regions of the country remain virtually unknown from an ecclesiastical perspective. It is clear that evangelization does not primarily coincide with the expansion of an institutional presence, but rather the opportunity to foster trustworthy, human and selfless relationships. In Mongolia, the Gospel is once again revealed above all as a way of life, even before being a religious discourse. And perhaps this is one of its most evangelical and fascinating aspects.

What is the specific nature of the synodal journey in a Church as young and small as the Mongolian one, with just over 1,400 baptized members?

The current phase of the Synod’s implementation places great emphasis on the fact that every Church is called to embody the synodal journey within its own concrete history. In Mongolia, this takes on a particularly strong meaning, because it is a Church that was practically born from scratch after 1992. Paradoxically, it is precisely such a young Church that risks being quickly weighed down by imported models. When a community is born, it is almost instinctive to reproduce structures, languages and pastoral categories that come from the missionaries’ Churches of origin. The problem concerns not only practical organization. It concerns the very way of conceiving the Church. The risk is that institutional structures will precede the ecclesial experience, that the building of structures comes before truly listening to people’s lives and to the concrete way in which the Gospel can take root in that culture.
Synodality, on the other hand, introduces a different approach. It compels us to slow down, to listen, and to discern together. It continually asks: what is truly necessary for a Christian community to emerge here? What forms truly help the Gospel to become shared life? In this sense, synodality protects the young Mongolian Church from the temptation to become a scaled-down copy of foreign ecclesial models.
There is also another very significant element. The Mongolian Church is made up of missionaries from almost thirty different countries. Here, ‘unity in diversity’ cannot remain a spiritual or diplomatic formula. It becomes a very concrete daily practice, concerning the way decisions are made, authority is exercised, and relationships are built between missionaries and Mongolian laypeople, between different religious congregations, and between ecclesial cultures that are sometimes very distant from one another. Synodality offers precisely a space in which this plurality can be transformed into communion without being reduced to uniformity.

The theme of the pastoral week was “The Catholic Church in Mongolia: gift and mission”. In what way does this pairing express the synodal vocation of a local Church?

Rather than a pairing, I would almost speak of a circularity. In Mongolia, it is abundantly clear that mission arises solely from the experience of having received something that does not belong to us. The Gospel is not primarily a project to be realized or an identity to be defended. It is a gift that precedes the Church itself. As Pope Francis said in Evangelii Gaudium, “Christians have a duty to proclaim it […] as those who share a joy, point to a beautiful horizon, offer a desirable banquet”. Pope Leo also emphasized that the Church evangelizes “by attraction”.
In such small and fragile contexts, another issue immediately comes to the fore. A missionary Church easily runs the risk of being identified with its own works, its organizational capacity, and the financial resources it manages to mobilize. Of course, all this has real value, especially in a country marked by many social vulnerabilities. However, the heart of the mission lies elsewhere. If the evangelical relationship does not remain at the centre, the Church inevitably ends up being perceived as just one of the many humanitarian agencies present in the area.
In Mongolia, then, it is understood with greater clarity that the Christian message is conveyed through the quality of relationships: time given freely, listening, the ability to share life without immediately occupying the other’s space. In Mongolia, the Church can only emerge within this logic of gratuitousness and openness. And perhaps it is precisely here that we touch upon one of the deepest core aspects of synodality: a Church that understands itself as a network of relationships animated, permeated and regenerated by the presence of the Lord.
Pope Francis, speaking of Mongolia during his visit, praised the missionaries who ‘inculturated’ themselves in order to ‘preach the Gospel in the Mongolian style’. How does this process of inculturation fit in with synodality?
If one takes the perspective of the Synod’s Final Document seriously, the relationship between inculturation and synodality appears almost inevitable. Synodality does not, in fact, consist of a participatory technique or a functional redistribution of ecclesial tasks. It concerns the way in which the people of God listen together to what the Spirit says within a specific history and a specific culture.
In Mongolia, this point emerges with particular clarity because Christianity is still in the early stages of taking root, and the steps taken by the missionaries and the Mongolian people are truly admirable. It is clear that the issue is not simply a matter of translating certain contents into the local language. It concerns something much deeper: how the Gospel can take root in the imagination, in the way relationships are lived, in the relationship with time, with nature, with the family, and with the hospitality characteristic of Mongolian culture.
Such a process cannot be imposed from above nor developed exclusively by missionaries. Rather, it requires genuine spaces for shared discernment. Dialogue in the Spirit takes on a very concrete significance here, because it allows newly baptized Mongolians to express what they genuinely feel is compatible with the Gospel and what, on the other hand, still seems alien or imposed from outside. Authentic inculturation always arises from reciprocity: the Gospel transforms a culture and, at the same time, the Church is transformed by its encounter with that people. Synodality safeguards and encourages precisely this reciprocal dynamism.

What is the added value of the synodal methodology for a Church that already lives out simple and flexible structures?

In reality, the structures I have encountered are fragile, perhaps simple, but not necessarily flexible. Even in Mongolia, there is a fairly rapid risk of building pastoral structures modeled on the ecclesial habits of missionaries. This is understandable, because every missionary inevitably brings with them their own way of conceiving the Church.
The synodal approach emphasizes the quality of relationships. Above all, it allows us to discover how rare it is, even within the Church, to listen authentically both to the Word of God and to others. We must recognize that many dynamics emerging in Mongolia are the same as those found elsewhere: the tendency to react immediately without pausing to consider what the other person is saying, the difficulty of allowing oneself to be truly questioned, and the struggle to discern together in the light of the Word of God rather than solely on the basis of one’s own pastoral convictions.
And the experience of the past few days has truly been a significant step forward. For example, some Mongolian laypeople spoke about their understanding of hospitality. It is striking how much importance is given to that very first contact, to the quality of one’s presence, and to the sensitivity with which one enters into another person’s life. This raises very practical questions for all of us: do our parishes, charitable organizations and schools truly reflect this sensitivity? How can we welcome, without expecting anything in return, someone who arrives for economic reasons and is not interested in the faith? How can asymmetrical relationships between those who give and those who receive be lived out in a spirit of generosity? Synodality allows us precisely to dwell on these questions without closing them off too quickly, whilst remaining attentive.
Finally, there is a very significant fruit already visible in the journey we have undertaken: the emergence of a small group of facilitators capable of guiding conversation in the Spirit and community dynamics. In a Church that feels a strong need to grow spiritually, this represents something very precious. The house of spirituality near Ulaanbaatar is moving precisely in this direction. However, places alone are not enough. A Church grows when there are people capable of nurturing spiritual processes, accompanying discernment and supporting mature ecclesial relationships.

Can the Mongolian experience offer something to the universal Church, both in terms of understanding synodality and the relationship between evangelization and inculturation?

I am certain of it: Mongolia compels the Church to return to questions that elsewhere risk being obscured by habit. In many countries with an ancient Christian tradition, people unconsciously continue to think of the Church within a cultural horizon which, though weakened, remains available: a shared religious language, a certain symbolic familiarity, established structures, and moral and social references settled over time. In Mongolia, however, what is essential and what belongs to secondary historical layers re-emerges with greater clarity.
The Mongolian experience reminds us all once again that synodality does not arise from an organizational need. It arises from the need to build real communion within a fragile, scattered, multicultural and minority Church, to nurture the missionary impulse, and to value each of the few baptized members who make it up. In such a context, it becomes particularly clear that synodality does not take shape around a logic of opposition or internal rebalancing, but around a shared responsibility for the proclamation of the Gospel and for the concrete life of the ecclesial community.
The Mongolian experience also serves as a reminder that synodality is not simply a matter of holding more and more consultations. It concerns the way in which the Church learns to live in relationships that are non-dominant, non-clerical and non-self-referential. In this sense, the ‘relational conversion’ referred to in the Final Document appears to be very much a reality in Mongolia.
Furthermore, Mongolia offers a valuable lesson even to the oldest Churches: it reminds us that Christianity never coincides perfectly with a civilization, a culture or a definitive historical form. The Gospel always transcends the structures and cultures that host it.

Pope Leo XIV, from his very first address, highlighted the importance of synodality for the Church. What would be the specific nature of the Holy Father’s approach in comparison to synodality defined as “mission, participation, communion” in the previous Synod?

Every Pope inevitably brings his own spiritual style, his own language and his own ecclesial sensibility. However, the decisive point of the synodal journey does not lie in the Pope’s personality, but in the process of assimilating the Second Vatican Council. Both Pope Francis and Pope Leo XIV have strongly emphasized this continuity. Synodality represents, in fact, one of the ways in which the Church is seeking to embrace conciliar ecclesiology more deeply within the historical conditions of the present.
For this reason, I would not speak of a break between a “Synod of Francis” and a new phase inaugurated by Leo XIV. The process is the same. The emphasis, priorities and way of exercising the Petrine ministry inevitably change, but the conviction that the Church is called to walk together through history under the guidance of the Spirit remains shared.
It seems to me, however, that the current context makes the prophetic significance of synodality even more evident, and that Pope Leo is fully grasping it. We live in a world marked by growing polarization, identity conflicts, and a progressive inability to live with differences without turning them into opposition. In this context, it is clear that synodality supports the way in which the Church bears witness to the possibility of a reconciled coexistence. Ecclesial communion does not eliminate tensions, but it prevents them from becoming a logic of mutual exclusion. And this is what can be offered to the broader society as well.
The categories of “communion, participation, mission” therefore remain central to Pope Leo XIV’s approach as well. In particular, mission increasingly appears as the horizon capable of bringing everything else together. A truly missionary Church cannot operate in self-referential ways, because the Gospel continually pushes it beyond itself.
There remains, moreover, a very strong awareness that has matured throughout the synodal journey: documents, on their own, do not bring about ecclesial transformation. They can guide, clarify and initiate processes. However, the true fruit of the Synod will depend on the concrete ability of the Churches to allow themselves to be transformed in their relationships, in the exercise of authority, in pastoral practices and in structures, with a view to mission. Ultimately, the Synod does not invite the Church to become something other than itself, but to allow that way of living, relating and walking together—which finds its source and criterion in Christ and his Gospel—to emerge more deeply, even in the concrete forms of daily life. (ML) (Fides News Agency, 19/5/2026)

Oyu Tolgoi Management Fee Agreed to Be Halved www.montsame.mn

 A working group established under Prime Ministerial Order No. 68 to reduce the management fee rate of the Oyu Tolgoi project is currently holding talks with the investor-side Rio Tinto.

Prime Minister Uchral Nyam-Osor stated that “the Government has achieved its first successful outcome in the Oyu Tolgoi negotiations.” The working group, led by Minister of Industry and Mineral Resources Damdinnyam Gongor, has reportedly reached an agreement with Rio Tinto to cut the Oyu Tolgoi project’s management fee by half and eliminate overlapping charges.

According to the Government Media and Public Relations Department, the agreement is expected to reduce costs by USD 2.2 billion and increase Mongolia’s benefits from the project by USD 1.5 billion.

N.Uchral: Oyu Tolgoi management fees to be cut by half www.gogo.mn

Prime Minister N.Uchral announced on his official website today that Mongolia has secured its first major result in the Oyu Tolgoi agreement. 

He said that as a result of negotiations with the Rio Tinto Group, the working group led by the Minister of Industry and Mineral Resources has reached an agreement to halve Oyu Tolgoi management fees and eliminate duplicate payments.

According to the Prime Minister, the agreement will reduce payment costs by USD 2.2 billion and increase the benefits Mongolia receives by USD 1.5 billion. The outcome is also positive for investors, noting that it reflects Mongolia’s ability to protect its interests and negotiate with investors on equal footing. 

Advanced Water Purification Plant put into operation www.gogo.mn

The Advanced Water Purification Plant (AWPP), built with advanced technology, has been put into operation, increasing Ulaanbaatar’s water supply.

Under the Millennium Challenge Compact signed between the Government of Mongolia and the United States Millennium Challenge Corporation on July 27, 2018, the “Ulaanbaatar City Water Supply Enhancement Program” was launched with a grant of USD 350 million from the U.S. government and USD 111.7 million from the Government of Mongolia.

Within this framework, a new western water source for Ulaanbaatar was established based on groundwater resources around Biokombinat and the Shuvuun Factory area, and a deep water purification plant equipped with advanced technology was built and commissioned.

President of Mongolia Khurelsukh Ukhnaa, U.S. Ambassador to Mongolia Richard Buangan, Acting Chief of Staff of the U.S. Millennium Challenge Corporation Dan Petrie, Deputy Minister of Finance B.Khulan, and Capital City Governor and Mayor of Ulaanbaatar Kh.Nyambaatar officially opened the plant.

The Water Compact is a major project that has introduced and localized advanced global technologies and infrastructure in Mongolia for the first time, while also improving the policy and legal environment in the sector. It is not only the largest investment in Mongolia’s water sector in the past 30 years, but also a symbol of the Mongolia–U.S. strategic partnership.

The new western water source will increase Ulaanbaatar’s overall water supply by up to 80% compared with 2016 levels and provide the capital’s 2.4 million residents with sustainable access to clean water meeting standards for the next 30 years. It is also expected to help prevent future water shortages and create the basic conditions for Ulaanbaatar’s westward expansion, including the development of satellite cities and residential areas.

In addition, the wastewater recycling plant, which is scheduled to be commissioned in March 2026, will introduce Mongolia’s first experience in recycling wastewater for energy production. The project is expected to save 18 million cubic meters of groundwater annually for future generations.

To ensure the long-term benefits of the program, work was also carried out to improve the legal, regulatory, and policy framework for the water sector, revise water service cost and tariff policies, support wastewater pollution control and reduction, and strengthen the institutional capacity of water supply and sanitation organizations.

A total of 8,270 jobs were created during the construction phase of the program, 92% of them filled by Mongolian workers. In addition, 73 new jobs were created in newly established factories.

To strengthen the human resources of water supply organizations operating the new infrastructure, 187 engineers and technicians from water supply organizations were trained and certified.

The opening ceremony was attended by high-level representatives from the two governments, officials from the capital city, representatives of the U.S. Millennium Challenge Corporation, the Mongolian Millennium Challenge Fund, contractors involved in the project, and other guests.

Gold-backed ETF launched www.ubpost.mn

The secondary market trading of units of Gold Trust Exchange-Traded Fund LLC, established by BBS LLC, launched on May 15 in a ceremony attended by senior financial regulators and market officials.

The event was attended by Financial Regulatory Commission Deputy Chairman T.Tserenbadral, Mongolian Stock Exchange Acting CEO D.Munkhbat, BBS CEO J.Bataa and other relevant officials. Speaking at the ceremony, Deputy Chairman T.Tserenbadral said the Financial Regulatory Commission has approved regulations and established a regulatory framework for exchange-traded funds in line with international standards, paving the way for new investment products in the domestic capital market.

Gold Trust Exchange-Traded Fund becomes the second ETF listed on the stock exchange, following Invescor Global Q Exchange-Traded Fund LLC, which received the first ETF license in 2023.

The fund is notable for being the country’s first gold-backed ETF, allowing investors to gain exposure to gold price movements through an investment fund without incurring additional costs. Investors can purchase units through the stock exchange in the same manner as buying shares. The fund’s underlying instrument is GLD, or SPDR Gold Shares ETF, a gold ETF that has traded on the New York Stock Exchange since November 2004.

Green loan rates cut www.ubpost.mn

Prime Minister N.Uchral received leaders of the banking and financial sector last week to advance the Government’s green financing policy, announcing expanded loan terms, reduced interest rates and a sweeping tax reform package as part of the country’s broader Green Development Liberalization agenda.

Governor of Mongol Bank S.Narantsogt announced that green loan terms have been extended from 30 to 60 months, cutting monthly payments by approximately 40 percent, with interest rates set four to six percentage points below standard loan rates. The loans cover solar panels, electric vehicles and building insulation.

“Green Development Liberalization is not a slogan, but a real work,” Prime Minister N.Uchral said, adding that the Government, Mongol Bank and the financial sector are jointly committed to expanding green lending across the country. The state has moved beyond policy declarations into early implementation. A total of 83 households in Chingeltei District are now generating energy through solar panels and collectors and feeding surplus power into the central grid, a development the Prime Minister described as “the real beginning of the policy of energy efficiency, green investment, and sustainable financing”. A government resolution reducing dependence on fossil fuels has already been adopted, and a 15-stage bureaucratic approval process that previously hindered green energy projects has been dismantled.

Governor S.Narantsogt said the Development Bank is preparing to attract lower-cost green financing sources and develop blended financing solutions. The Government also signaled strong support for green bonds in the capital market as an additional instrument to fund the transition. Officials acknowledged that work remains, including expanding subsidy sources and ensuring loan accessibility accounts for varying household income levels.

The Premier also outlined a tax reform package submitted to Parliament, framing it as relief for working Mongolians and small enterprises. Key measures include a 100 percent reduction in personal income tax for monthly incomes up to 792,000 MNT, an increase in the VAT registration threshold from 50 million to 400 million MNT, and a one percent tax rate for companies earning up to 2.5 billion MNT annually. In the first month of a tax debt amnesty period, the Government reopened accounts for companies carrying tax and VAT arrears, and 146 businesses were cleared to resume operations immediately without requiring additional permits.

The meeting also addressed mounting pressure on the housing mortgage program. Over the past 13 years, 144,600 households have obtained homes through the joint Government and Mongol Bank mortgage initiative. Commercial bank loans now account for 62 percent of total housing lending. However, demand for the Government’s subsidized six-percent mortgage loan far outpaces supply, with 47,000 applicants currently on a waiting list. Governor S.Narantsogt said the central bank and the Government are working to amend housing mortgage financing regulations and establish a dedicated Housing Financing Bank to ease the bottleneck and introduce a wider range of mortgage options.

Kincora Receives Option Payment for Divestment of Mongolian Assets www.tradingview.com

(Kincora or the Company) is pleased to announce it has executed a Term Sheet and received a non-refundable Option Payment of US$1.5-million from Tumen Ail Coal LLC (TAC) providing it exclusivity to secure 100% of Kincora's wholly owned Mongolian subsidiaries (the "Transaction"). TAC is an arms-length group with assets and operations in Mongolia.

The aggregate staged consideration for the Transaction is US$10-million, payable in full to Kincora, free and clear of any taxes, levies, or fees, but excluding certain contractual obligations of Kincora's.

All definitive transaction documents shall be executed no later than July 1st, 2026, at which milestone the next staged payment of US$3.5-million is due to Kincora.

Upon execution of the definitive agreement, TAC shall deposit the final staged payment of US$5-million into an escrow account for release upon registration of the changes in the shareholders of the Mongolian subsidiaries which is anticipated to occur before year-end.

About Kincora

Kincora Copper Limited is an emerging Australia-focused gold-copper explorer with a hybrid project generator strategy and currently drilling at two projects (Nevertire South and Condobolin).

The Company is successfully proving up the prospectivity of its extensive project portfolio, which includes multiple district-scale landholdings and scalable drill ready targets. These assets are located in Australia's Lachlan Fold Belt and Mongolia's Southern Gobi, two of the globe's leading porphyry belts, and the historical Condobolin mining field within the Cobar basin in NSW.

The Company has already unlocked over $100 million of potential partner funding for multiple earlier stage and/or non-core porphyry projects. These initial deals have supported over 20,000 metres of drilling and over A$10m of partner funded exploration since late 2024, with management fees and exploration ramping up.

Various partner discussions are ongoing for its remaining 100% owned flagship and advanced exploration stage porphyry projects.

By having a significant portfolio of partner funded large porphyry projects, and a very focused capital efficient programs at the Condobolin and other sole funded projects, the Company is seeking to position Kincora as a leading institutional grade explorer in the public Australian and Canadian markets, and the leading project generator on the ASX.

Museum industry aims for MNT 10 billion in annual revenue www.gogo.mn

A scientific conference under the theme “Museum Research: Museums Uniting a Divided World” was held in celebration of International Museum Day.

Minister of Culture, Sports, Tourism and Youth J.Aldarjavkhlan said the development of the museum sector will be elevated to a new level by focusing on three main areas:

Increasing the quality and value of museum services and raising the industry’s annual revenue to ₮10 billion;
Improving service accessibility through the phased introduction of digital transformation and innovative solutions;
Creating conditions for at least 50% of tourists visiting Mongolia to visit museums as part of tourism development.
During the conference, participants discussed presentations related to the preservation and protection of cultural heritage, as well as the results and significance of the national inventory of movable historical and cultural artifacts.

The discussion was attended by G.Batkhuyag, Head of the Department of Culture and Arts of the Government Implementing Agency, Z.Badamkhatan, Director of the Institute of Paleontology of the Mongolian Academy of Sciences, and National University of Mongolia lecturers D.Barsbold (Ph.D), and S.Badral (Ph.D).

More than 250 specialists from 44 national, state, and local museums, as well as researchers and scholars from universities and research institutions, participated in the conference.

Participants exchanged views on the current state and future development of the museum sector, challenges related to the preservation and protection of cultural heritage, digital transformation, and international best practices.

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.