Marking the 55th anniversary of the establishment of diplomatic relations between Mongolia and the Italian Republic, State Secretary of the Ministry of Roads and Transport Development of Mongolia Batbold Sandagdorj and Deputy Prime Minister and Minister of Foreign Affairs and International Cooperation of the Italian Republic Antonio Tajani signed an Agreement on Aviation Relations.

The Agreement aims at expanding and developing international cooperation in the aviation sector between Mongolia and Italy, establishing a legal framework for direct flights between the two countries, and laying the foundation for broader cooperation across various sectors. It will help promote economic relations and boost trade turnover.

In recent years, trade between Mongolia and Italy has steadily increased, with bilateral trade turnover ranging from USD 150 to 188 million between 2022 and 2024. Italian enterprises producing knitted and woven goods have been importing combed wool and cashmere from Mongolia, comprising a major portion of exports from Mongolia to Italy, and this volume is expected to grow further.

Transporting raw materials by sea and land is time-consuming and faces numerous customs and logistical challenges. Therefore, Italian companies are keen on air freight. The Intergovernmental Agreement on Aviation Relations is vital not only for tourism and passenger transport but also for developing freight cargo operations.

The Ministry of Road and Transport Development reported that the two sides have agreed to collaborate on developing aviation relations between the two countries, expanding air transport services at regional and international levels, and fostering cooperation in road transport and other fields. The two countries will also collaborate in establishing an "International Road Transport Agreement" between the Government of Mongolia and the Government of the Italian Republic, as well as expediting mutual recognition of driver's licenses.

On the sidelines of the World Economic Forum held in Davos, Switzerland, Deputy Prime Minister of Mongolia and Chair of the National Committee of Energy Dorjkhand Togmid met with foreign representatives to discuss energy cooperation.

Deputy Prime Minister Dorjkhand met with Minister of Investment of the Kingdom of Saudi Arabia Khalid Al-Falih. The two sides discussed advancing the dialogue between Prime Minister of Mongolia Oyun-Erdene Luvsannamsrai and the Saudi side on cooperating in green energy during his visit to the country in December 2024 and collaborating in other fields.

Deputy Prime Minister Dorjkhand informed Minister of Investment Khalid Al-Falih of the 14 mega projects the Joint Government of Mongolia is implementing. The two sides exchanged views on investment opportunities in Mongolia. Minister of Investment Khalid Al-Falih expressed great interest in investing in Mongolia, underlining the possibility of mutually beneficial cooperation in the energy sector. The two sides agreed to put greater emphasis on establishing an intergovernmental agreement and memorandum on cooperation in renewable energy between the Government of Mongolia and the Government of Saudi Arabia.

Minister of the Cabinet Affairs of the United Arab Emirates Meets with Deputy Prime Minister Dorjkhand Togmid

The two sides discussed moving to the next stage of dialogue on renewable energy cooperation, which was initiated during Prime Minister of Mongolia Oyun-Erdene Luvsannamsrai’s visit to the UAE in December 2024. The parties also held talks on signing a Memorandum of Understanding in the near future with the Ministry of Energy of the UAE and MADSAR company, which is one of the leading companies in renewable energy.

Minister of Cabinet Affairs of the UAE Mohammad Abdullah Al Gergawi expressed desire to establish a Joint Economic Committee between the two countries and invited Deputy Prime Minister Dorjkhand to visit the UAE and attend the “World Government Summit” in Dubai.

Mongolia Signs a Memorandum of Understanding with “Envision” in the Energy Sector

The National Committee on Energy of Mongola signed a Memorandum of Understanding (MoU) with the Envision Group, a global leader in green technology. Under this MoU, the two sides will cooperate in building a 500-megawatt battery energy storage station, export renewable energy, and create green jobs, in alignment with Mongolia’s long-term development policy “Vision 2050” and the “New Recovery Policy.”

Deputy Prime Minister of Mongolia and Chair of the National Committee on Energy Reform Dorjkhand Togmid highlighted that Envision’s proven solutions will help Mongolia fully harness its renewable energy potential, establish reliable energy infrastructure, and foster stable development in the region. Chairman of the Board of Directors of Envision Group Zhang Lei expressed confidence that this partnership will enable Mongolia to achieve its climate change objectives and accelerate economic development.

In collaboration with the International Finance Corporation, China’s Envision Group has built a 50 MW/200 MWh energy storage facility in the Baganuur district, financed through bonds issued by Ulaanbaatar City. The facility will be handed over before this winter’s peak demand period.

UNICEF Mongolia has been collaborating to support the Government of Mongolia to enhance child-focused budget planning and social service delivery for children and households. This commitment includes a substantial increase in funding to address pressing issues related to child health, nutrition and safety.

The Ministry of Finance has allocated an additional 133.5 billion MNT in the 2025 state budget to improve nutrition programs at schools nationwide. This funding increase follows cost analyses of school and dormitory meal standards conducted under the UNICEF-EU co-funded Public Finance Facility-Phase II project. These analyses mark a significant milestone in tackling critical challenges affecting Mongolia’s children.

Key Challenges

Recent surveys and studies underscore the urgent need for improved access to safe drinking water and better nutrition for children:

Safe Water Accessibility: Only 30.6% of Mongolia’s population has access to safe drinking water, according to the Multiple Indicator Cluster Survey (2023). In rural areas, merely 48% of schools provide purified drinking water, as reported in the School Meal and Dormitory Cost Analysis Report (2024).

Unhealthy Dietary Patterns: A 2023 Child Landscape Analysis revealed troubling trends in children’s eating habits:

26% of school-age children consume fast food three or more times per week.

34% of children drink more than one carbonated beverage daily.

81% consume fewer fruits and vegetables than recommended.

These findings highlight the critical role schools play in providing a supportive environment for safe drinking water and balanced nutrition to ensure children’s healthy development and protection.

Public Finance Facility Project-Phase II

To support data-driven policymaking, UNICEF Mongolia, in collaboration with the European Union, continues to implement the Public Finance Facility Project-Phase II. This initiative works closely with the Ministry of Finance and other sector ministries to conduct in-depth analyses of budget allocation and spending. The goal is to strengthen systems and services essential for children’s welfare.

By addressing the underlying issues of water accessibility and nutrition, Mongolia is taking a significant step toward improving the health and safety of its younger generation. UNICEF Mongolia remains committed to supporting these efforts through research, collaboration, and advocacy for effective resource allocation.

The Governor’s Office of the Capital City of Mongolia (MUB) has successfully issued its first over-the-counter (OTC) market bond through a private placement to the International Finance Corporation (IFC). The proceeds will fund a new 50-megawatt Battery Energy Storage System (BESS) in Baganuur District, enhancing Mongolia's power supply reliability and supporting renewable energy integration.

This five-year bond marks the first non-sovereign guaranteed municipal bond to a foreign investor in Mongolia, freeing up valuable public funds and establishing a new asset class for attracting investments in sustainable infrastructure. Once operational, the BESS will provide uninterrupted electricity for up to four hours daily, benefiting 25,000 households. With nearly half of Mongolia’s population residing in Ulaanbaatar, the city faces growing energy demands amid challenges like air and soil pollution, traffic congestion, and the need for a reliable power supply.

“Ulaanbaatar is rapidly expanding, and we must ensure our energy infrastructure keeps pace. The Baganuur BESS is a significant step toward a greener, more resilient future for our city, as it enables integration of more wind and solar energy into use. By partnering with IFC and Envision Energy, we are demonstrating our commitment to harnessing innovative, world-class solutions that will benefit our growing population and help us meet our sustainability goals,” said Nyambaatar Khishgee, Mayor of Ulaanbaatar City and Governor of the Capital.

"Our latest research indicates that to achieve Mongolia's climate and development goals, an additional investment of more than $10 billion is needed over the next 25 years," said Matthieu Le Blan, IFC's newly appointed Resident Representative for Mongolia. "Public and private partnerships are essential for mobilizing the capital required to expand energy-efficient measures, including energy storage, which are key to accelerating Mongolia's energy transition. We remain ready to support the Municipality of Ulaanbaatar on its journey towards a sustainable future."

IFC’s investment also includes funding from the Canada-IFC Blended Climate Finance Program. This marks IFC’s first municipal investment in the Asia Pacific region and is part of the World Bank Group’s strategic engagement in Mongolia’s energy transition plan. Other initiatives include a comprehensive diagnosis of Mongolia's energy sector, funding for a 188 km, 220 kV double circuit transmission line from Baganuur to Choir, and a feasibility study for a 200MW grid-side battery storage project. Since 2021, IFC has been supporting MUB in exploring new ways to attract private sector participation in Ulaanbaatar’s sustainable infrastructure development program.

The BESS comprises 27 battery blocks with an advanced liquid cooling and battery management system, a new 110/35 kV substation and control building, over-head transmission line, expansion of the grid substation, and access roads. Ulaanbaatar City Development Corporation JSC will oversee the station’s operations moving forward.

About IFC

IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2024, IFC committed a record $56 billion to private companies and financial institutions in developing countries, leveraging private sector solutions and mobilizing private capital to create a world free of poverty on a livable planet. For more information, visit www.ifc.org.

Stay Connected with IFC on social media.

About the Canada-IFC Blended Climate Finance Program

The Canada-IFC Blended Climate Finance Program aims to mobilize private capital for global climate action and reflects Canada's commitment under the 2015 Paris Agreement to support developing countries in their transition to sustainable and resilient low-carbon economies. For more information on Canada’s investment in global climate change action, visit Canada’s climate finance for developing countries (international.gc.ca).

About the Capital City of Mongolia

For more information, visit www.ulaanbaatar.mn.

It was almost three decades ago that French miners decamped to the southern Gobi Desert in search of hidden riches. By 2006, they found what they were looking for: rich deposits of uranium lurking beneath the windswept sand dunes and rusting oil pumps. A series of pilot projects and environmental and economic assessments followed.

On Jan. 17, Mongolia’s first uranium mine, Zuuvch-Ovoo, was finally green-lighted with the signing of a $1.6 billion joint investment agreement between its government and French majority state-owned energy company Orano. “Uranium production in Mongolia will contribute both to low-carbon electricity generation and security of supply for our customers,” said Orano CEO Nicolas Maes in a statement.

The inking of that deal is both an economic boon for Mongolia and a welcome shot in the arm for the global fight against climate change just as returning U.S. President Donald Trump once again withdraws the world’s top economy from the Paris Agreement. While nuclear power remains controversial in some quarters, it has just a quarter of the carbon footprint of even solar, prompting more than 20 countries at COP28 to call for a tripling of the world’s nuclear energy capacity by 2050.

The Orano deal is also significant geopolitically, helping democratic Mongolia to further cultivate “third neighbor” links beyond the two authoritarian goliaths on its borders, China and Russia. But given the landlocked nation of 3.5 million is reliant on Beijing for 90% of trade and Moscow for 90% of imported gas and petroleum, the deal with France—a key backer of Ukraine in its war with Russia—isn’t without risk.

Tellingly, Mongolia hosted Russian President Vladimir Putin for a state visit in September, while controversially ignoring the International Criminal Court warrant for his arrest over alleged war crimes. “It’s unfortunate and damages our relations with third neighbors and also our democratic image,” Tsakhiagiin Elbegdorj, who served twice as Mongolian Prime Minister as well as President from 2009 to 2017, tells TIME. “I would have avoided it and advised [Putin] not to come.”

Aside from potential geopolitical blowback, Zuuvch-Ovoo is also a cautionary tale given the delays that have blighted it. When TIME visited the site last March, 11 tons of yellow-cake uranium produced by an 2021-2022 feasibility study were still being stored within dusty shipping containers, since Orano hadn’t been granted an export license. Even now, it will take another four years before the mine will start producing uranium, which is estimated at 2,750 tons annually over its 30-year lifespan.

Mongolian Prime Minister Oyun-Erdene Luvsannamsrai knows only too well the deleterious cost of delays. Despite winning a majority in June’s general elections, he chose to forge a “grand coalition” with minority parties. The goal, he says, is to try to build consensus on necessary infrastructure and development projects to prevent them becoming political footballs to be discarded and revived as one administration passes to the next. However, critics worry bringing minority parties into the majority tent weakens legislative scrutiny.

On Tuesday, TIME spoke via Zoom with Oyun-Erdene about the Orano deal, building relations beyond Russia and China, and boosting trade despite the expected tariffs of Trump 2.0.

This interview has been edited for clarity and length.

TIME: How significant is the Orano investment agreement for your goal of turning Mongolia into a major player on the global uranium market?

Oyun-Erdene: The Orano agreement is very important because Mongolia’s economy is based on our mining sector. The negotiation process with the French government took more than 10 years. Of course, there have been some challenges related to environmental issues as well as meeting some international standards, but … now Mongolia is one of the region’s uranium producers. And I would like to emphasize that it represents the second largest foreign direct investment from a third neighbor country to Mongolia.

How else are you strengthening Mongolia’s position in the global supply chain for critical minerals, especially with regard to third neighbors?

Of course, minerals are very important for Mongolia, as we have abundant resources, especially critical minerals. And besides the uranium project, we’re also in collaboration with the German and South Korean governments on exploration projects for critical minerals. In the future, we are very keen to cooperate with other third neighbors and we are very open to share data about Mongolia’s deposits. The government of Mongolia is planning to attend the PDAC Conference, which will take place in Toronto, Canada, in March. At that time, we will also have opportunities to talk with investors and share information about Mongolia's mapping and deposits of critical minerals.

Mongolia is landlocked and uranium exports rely not only on your government retaining good relations with your two neighbours, Russia and China, but also France doing so. Are you worried that this boon may end up becoming hostage to geopolitics?

Indeed, there have been some challenges in the past 10 years negotiating this agreement. Of course, as you have mentioned, geopolitical tensions and transport challenges have been the main issues and causes of this delay. But now we have successfully agreed on this investment framework agreement, and we estimate that we won’t have any transportation or logistic challenges. And I would like to commend the French government on resolving this issue.

Putin visited Mongolia in September despite an International Criminal Court warrant for his arrest over alleged war crimes. Does this mean your government now rejects the jurisdiction of the ICC, and what message should third neighbors take?

The world has changed very fast over the past couple of years. But Mongolia’s position is very firm that we are a peace-loving country, and we always stand for peace not war. So we believe that all conflicts and disputes and tensions should be resolved through negotiations and diplomatic talks. And we were firm on this position, especially during the COVID-19 pandemic, as well as the Russia-Ukraine war.

The governments of Mongolia and the Russian Federation have had friendly relations and historic ties since 1921. Every five years, the head of state of the Russian Federation pays a visit to Mongolia to celebrate the anniversary of our joint victory at the Khalkhin Gol battle. So we were explaining this situation to our partners, third neighbors, as well as to the ICC, in the run up to this anniversary, as well as the challenges and the economic dependency that we have regarding the Russian Federation. Also during and after the visit, our Ministry of Foreign Affairs worked very closely with our partners and the ICC to offer this explanation, and we do believe that we have made clear that we have some challenges in this regard.

We’ve spoken before about your efforts to combat corruption. In December, Orano agreed to pay a €4.8 million [$5 million] fine to settle a bribery investigation in relation to its mining operations in Mongolia. Is this not a concern given your firm stance on corruption?

We are aware of the bribery case, and the government of Mongolia wants to be as transparent and open as possible. So we have openly discussed this issue during our Cabinet meetings and we are also in talks openly with our prosecutor’s office. But we don’t believe that we have to lose time because this agreement is beneficial to both the government of Mongolia and the French government. So we believe in the judicial process. The judicial process will go on separately, but the investment framework agreement will be implemented as agreed.

Also, I participated in the One Water Summit in Saudi Arabia in December. I met with President Emmanuel Macron and discussed this issue, and we had excessive talks on how the two sides can cooperate closely. So we are confident that this bribery case will be solved according to the laws and rules, and the investment agreement will proceed smoothly.

Mongolia recently established a sovereign wealth fund. What steps have you taken to ensure investments meet international ESG [environmental, social, governance] standards?

Yes, Mongolia has approved the law on the sovereign wealth fund, which has three funds: a savings fund, future heritage fund, and the development fund. As of December 2024, we have accumulated $1.3 billion, and this revenue will increase as these mining projects proceed successfully. In our E-Mongolia digital platform we have opened accounts for each citizen who will receive revenues from mining projects [as part of the saving fund]. So when the [Orano] project starts and revenues start coming, people’s accounts will get money from this project [which they can spend in critical areas such as health care, education, and housing.] It’s very important that the Mongolian people can actually feel and see the benefits of our natural resources.

The U.S. has a new President who has campaigned on raising tariffs on many nations, including a possible 60% tariff on Chinese exports. Mongolia’s own economy is very much dependent on China, so are you worried about this new term of Trump and possible trickle down effects on Mongolia’s economy? As well as the effect of tariffs on the broad global trade landscape?

The Mongolia-U.S. relationship is very robust. I’m also confident that the relationship will be expanded because President Trump personally knows about Mongolia. In 2019, during President Trump’s first administration, the Mongolia-U.S. relationship was elevated to a strategic partnership, and President Trump is actually one of the few U.S. Presidents who have received our President for a visit. Also, President Trump’s family has paid several visits to Mongolia on personal trips to get acquainted with our nomadic lifestyle and beautiful landscape. So I’m confident that during his second tenure, our relationship will deepen further, as his administration understands the situation and challenges of Mongolia and will extend its support for our parliamentary democracy.

As regards to China, of course, we export our coking coal to the People’s Republic, and there is an issue that the price might decrease because of the tariffs on electric vehicles [owing to reduced demand for steel]. But we are cooperating very closely with the Chinese government on expanding our cooperation, especially on exports. We are working to establish a railway connecting agreement with China Energy Group so that we can export more coking coal to China. So we do believe that by increasing exports of our coal, we would not have any large disadvantages in terms of loss of economic revenues. Also, during my recent visit to Abu Dhabi, I met with Eric Trump, and we had an exchange about possible effects on Mongolia’s coking coal exports from this electric vehicle tax.

After last June’s election you entered a “grand coalition” with the [Mongolian] Democratic Party and HUN Party even though you had a parliamentary majority. Why was that, and are you satisfied with the results?

In the history of Mongolia, there have always been more than 10 mega development projects that were discussed but were never actually realized. So this government has introduced 14 mega development projects that we aim to implement within our term of office. And the [parliament] approved a constitutional amendment [to expand the legislature and adopt a mixed electoral system]. So these were all catalysts to form this coalition government, because I saw that Mongolia was too politicized. As a small kid, I looked forward to my country’s development, and there have been some projects that people discussed at that time, but still no progress has been made because of political divisions.

As we all know, the world is getting very polarized, especially with these wars, and the situation is very unpredictable. So we want to be ready, and we want to stand for our fundamental values, which is very important for our economic stability and resilience going forward. And also, I would like to emphasize that this new government has seen a drastic change in Mongolian politics, because now we have representatives of five political parties, and 70% are totally new MPs, and 25% are women. So we have actually become the leader in terms of [female representation] in Asia. So the bottom line is that consensus is very important in this parliament, in this government, and Mongolia.

Anti-government protests have flared up in recent weeks in Ulaanbaatar. What is the takeaway for your government?

One of the main reasons for these protests was the energy price liberalization that our government enacted recently. Of course, this was a difficult decision for our citizens, but it was very important because costs were not reflected by the price that we were actually selling energy. And to advance our energy projects, it is important for us to reform our energy sector. Of course, there are many projects, especially mega development projects, ongoing, including the Orano project. Not everyone can be content with everything that is going on.

There is also much discontent among the public regarding the judiciary system, because there are still ongoing cases related to the coal theft issue that happened two years ago, and also some issues related to the development bank, so the people were asking about those processes. We met with representatives of the protesters to listen to their demands. This is part of the democratic process, and it is very important for us to understand our people’s needs and to make information available and transparent to the public.

Tokyo | Rio Tinto has offered the Mongolian government $US295 million ($472 million) to settle a long-running tax dispute over the Oyu Tolgoi copper mine, which it hopes to resolve amid speculation of a possible merger with Glencore.

Rio Tinto’s copper chief, Katie Jackson, wrote to Mongolia’s Minister of Industry and Mineral Resources Tuvaan Tsevegdorj in December, proposing to resolve tax claims covering the period from 2013 to 2020, a source, speaking on the condition of anonymity because the document was private, told The Australian Financial Review.

Rio Tinto has offered the Mongolian government $US295 million to settle a long-running tax dispute over the Oyu Tolgoi copper mine. Bloomberg

The confidential settlement offer comes with a “no fault” clause as Rio Tinto faces several class actions from investors over alleged delays in disclosing cost blowouts at the huge copper project. The mining giant would attend a scheduled mediation hearing in New York on February 5 and the claimants included Pentwater Capital Management, the source said.

The timing of these developments is significant, following reports that Rio Tinto and Glencore have discussed a potential $260 billion merger that would create the world’s largest mining company. Neither company has commented on the possibility of a tie-up.

Under the proposed tax settlement, Rio Tinto would waive its right to claim disputed taxes of 814 billion Mongolian tugrik but contest an additional 445 billion tugrik in interest and penalties. The total settlement offer of $US295 million includes $US285 million for the current dispute and $US10 million for pending matters, excluding interest and penalties.

“We share the government of Mongolia’s commitment to resolve the ongoing tax dispute through mutual understanding and to come to a clear and comprehensive agreement to avoid any future tax disputes,” Ms Jackson wrote in the letter.

Rio Tinto’s spokesperson said on Wednesday: “We are actively working with the government of Mongolia to reach a mutual understanding on tax matters. As long-term partners, we are focused on reaching an outcome that benefits all stakeholders. Discussions are ongoing and we are unable to share further details at this time.”

Reset the relationship

The settlement attempt follows Rio Tinto’s 2022 decision to pay $US2.4 billion to reset its relationship with Mongolia. The company has been seeking to improve ties with the resource-rich nation as it ramps up underground operations at Oyu Tolgoi, which is expected to become one of the world’s largest copper mines.

The February mediation in New York relates to separate class actions filed by investors in the US and Canada. These shareholders claim they lost money because Rio Tinto was slow to disclose issues about delays and cost overruns at the project.

If successful, the proposed merger with Glencore would create a mining powerhouse controlling roughly 7 per cent of global copper production, positioning the combined entity to capitalise on the growing demand for the metal, which is crucial to the global energy transition.

Rio Tinto is pivoting away from its traditional reliance on Australian iron ore, and plans to boost copper volumes by 18 per cent next year and 40 per cent by 2030. The company aims to increase production from 620,000 tonnes in 2023 to 850,000 tonnes in 2025, reaching 1 million tonnes annually by the decade’s end.

Mongolia’s Oyu Tolgoi mine is central to this strategy, with projected output to more than double to 500,000 tonnes by 2030. The shift is designed to reduce Rio’s earnings dependence on iron ore from 77 per cent to about 55 per cent, capitalising on the growing demand for copper driven by the global energy transition.

The Mongolian government said it was reviewing the letter but had not yet formally responded

Rio Tinto shares closed at $119.61 on Wednesday, down 0.8 per cent.

BY: Jessica Sier is the North Asia Correspondent for The Australian Financial Review. She is based in Tokyo, Japan. Jessica has previously written on technology, global capital markets and economics. Connect with Jessica on Twitter. Email Jessica at jessica.sier@afr.com

As part of the efforts to reduce traffic congestion in the capital, the Ulaanbaatar Tram Project is being implemented. On January 23, 2025, Project Director B. Anu-Ujin provided an update on its progress.

According to her statement, the tram route has been finalized and the project is currently 20 percent completed. In other words, it is currently in the stage of research, feasibility study, and design development. Two tram routes are planned. Specifically, the first line will run from the Nisekh Roundabout, along Yarmag Road, crossing the Peace Bridge, and ending at Sukhbaatar Square. The Peace Bridge will be reinforced, as the tram will pass over it. The design phase is expected to be completed by April 1, 2025, with the entire project planned for completion by 2030. As for the second line, it will run from Sukhbaatar Square to Zunjin. Land clearance along this route is currently in progress.

Project Director B. Anu-Ujin stated, “This project can be implemented relatively quickly while ensuring road safety and passenger comfort. Each tram unit can carry 150–300 passengers, with an average speed of 30 km/h and a top speed of 60 km/h. Traveling by tram from Yarmag to Sukhbaatar Square is estimated to take 20–30 minutes. As a result, traffic congestion on Yarmag Road could be reduced by 27.5 percent.”