1 WHAT WILL DRIVE MONGOLIAN POLITICS AND ECONOMY IN 2026? WWW.THEDIPLOMAT.COM PUBLISHED:2025/12/30      2 MONGOLIA 2025: MAPPING FOREIGN POLICY AND POLITICAL CHANGE WWW.INSIDEMONGOLIA.MN PUBLISHED:2025/12/30      3 MONGOLIA LAUNCHES 24/5 OTC SECURITIES TRADING WWW.POSTTRADE360.COM PUBLISHED:2025/12/30      4 THE LEGENDARY SLEEPER TRAIN CONNECTING 3 COUNTRIES IN 7 DAYS CROSSES 8 TIME ZONES WWW.MIRROR.CO.UK PUBLISHED:2025/12/30      5 MONGOLIA CELEBRATES RESTORATION OF ITS INDEPENDENCE WWW.MONTSAME.MN PUBLISHED:2025/12/30      6 LIVESTOCK NUMBERS UP 0.8 PERCENT, HERDER HOUSEHOLDS DOWN BY 1,600 WWW.MONTSAME.MN PUBLISHED:2025/12/30      7 OVER 850,000 TOURISTS VISIT MONGOLIA THIS YEAR WWW.MONTSAME.MN PUBLISHED:2025/12/30      8 DRAFT TAX REFORM PACKAGE UP FOR PARLIAMENT SUBMISSION WWW.UBPOST.MN PUBLISHED:2025/12/26      9 MONGOLIA LAUNCHES WORLD'S FIRST 24/5 BLOCKCHAIN-BASED SECURITIES TRADING WWW.KIPOST.NET  PUBLISHED:2025/12/26      10 CONSTRUCTION OF OIL REFINERY AT 50 PERCENT COMPLETE WWW.MONTSAME.MN PUBLISHED:2025/12/26      ЭНЭ ОНД ДҮҮЖИН ЗАМЫН ТЭЭВРИЙН 18 ТУЛГУУР БАГАНЫГ СУУРИЛУУЛЛАА WWW.GOGO.MN НИЙТЭЛСЭН:2025/12/30     МАНАЙ УЛСАД ЭНЭ ОНД 850 МЯНГАН ЖУУЛЧИН ИРЖЭЭ WWW.MONTSAME.MN НИЙТЭЛСЭН:2025/12/30     СЭМЮЭЛ БЕКЕТТ ГҮҮР МОНГОЛ УЛСЫН ТӨРИЙН ДАЛБААНЫ ӨНГӨӨР ГЭРЭЛТЖЭЭ WWW.EAGLE.MN НИЙТЭЛСЭН:2025/12/30     ХСҮТ РОБОТ МЭС ЗАСЛЫН ЭМЧИЛГЭЭГ АМЖИЛТТАЙ НЭВТРҮҮЛЛЭЭ WWW.ITOIM.MN НИЙТЭЛСЭН:2025/12/30     НИТХ: НИЙСЛЭЛ 77 ТЭРБУМААР 2000 ЦАХИЛГААН МАШИН ХУДАЛДАН АВЧ, ТАКСИ ҮЙЛЧИЛГЭЭНД ЯВУУЛАХЫГ ДЭМЖЛЭЭ WWW.ITOIM.MN НИЙТЭЛСЭН:2025/12/30     ТАЙЛАНДААС МОНГОЛ РУУ ЧИГЛЭСЭН ЗАЛИЛАН ҮЙЛДЭЖ ₮1.1 ТЭРБУМЫН ХОХИРОЛ УЧРУУЛСАН ЭТГЭЭДИЙГ БАРИВЧИЛЖЭЭ WWW.EGUUR.MN НИЙТЭЛСЭН:2025/12/30     УЛСЫН ХЭМЖЭЭНД МАЛЫН ТОО 445 МЯНГААР ӨСЧ, 58.1 САЯ ТОЛГОЙ МАЛ ТООЛОГДЖЭЭ WWW.NEWS.MN НИЙТЭЛСЭН:2025/12/30     Ж.ЧИНБҮРЭН: ХДХВ/ДОХ-ЫН ХАЛДВАРТАЙ 12 ИРГЭН ХЯНАЛТАД ОРОХГҮЙ АЛДАГДСАН НЬ ҮНЭН WWW.GOGO.MN НИЙТЭЛСЭН:2025/12/26     БАТ-ӨЛЗИЙ, ХУЖИРТ СУМЫГ ХОЛБОСОН АВТО ЗАМЫГ УЛСЫН КОМИСС ХҮЛЭЭН АВЛАА WWW.MONTSAME.MN НИЙТЭЛСЭН:2025/12/26     "ОЮУТОЛГОЙ"-Н ТОГТООЛЫН ТӨСӨЛ БАТЛАГДАЖ, ТҮР ХОРОО ТАТАН БУУГДЛАА WWW.EGUUR.MN НИЙТЭЛСЭН:2025/12/26    

Category

Events

Events

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MBCC “Doing Business with Mongolia seminar and Christmas Receptiom” Dec 10. 2025 London UK MBCCI London UK Goodman LLC

NEWS

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Mongolia:Regulatory sandbox framework has been amended and approved www.asiainsurancereview.com

In order to test new technology-based financial products and services in a controlled environment and establish a legal framework tailored to the characteristics and specifics of these products and services, amendments to the "Regulatory Sandbox Framework" were jointly approved by the Financial Regulatory Commission's chairman, the minister of finance and the governor of the bank of Mongolia by Joint Decree No. 124/75/A-86.
The amendments and additions to the framework set out temporary regulations regarding the process of transitioning products and services that have been successfully tested in the sandbox environment to the regulated market, as well as monitoring and regulation during the period until a regulatory environment is fully established.
The new rules also address the temporary suspension of activities by participants, compliance with anti-money laundering and counter-terrorism financing legislation and restrictions on the use of the sandbox environment to circumvent licensing requirements. These changes are aimed at supporting innovation and reform in the financial sector, while also preventing legal gaps and ambiguities, reducing delays and enhancing the transparency and effectiveness of the sandbox framework.
As of the first quarter of 2025, a total of eight products and services from five companies are being tested in the sandbox regulatory environment.

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Resource-rich Mongolia faces political uncertainty after the prime minister resigns www.apnews.com

Resource-rich Mongolia is facing political uncertainty following the resignation early on Tuesday of its prime minister in the wake of protests over endemic corruption in the landlocked Asian country, squeezed between China and Russia.
Before he lost the confidence vote in the parliament, Prime Minister Oyun-Erdene Luvsannamsrai warned that his removal could undermine Mongolia’s fledgling democracy. The vote followed weeks of protests sparked by reports of lavish spending by his son and calls for him to step down.
The reports, which cited expensive jewelry and helicopter rides for the son’s female companion, underscored the vast gap between Mongolians who have grown extremely wealthy off the country’s exports and much of the rest of the population, mired in poverty.
Here is a look at why what is happening in Mongolia matters:
A fledgling democracy between two big powers
Mongolia, a country of about 3.5 million people, borders Russia to the north and China to the south. Its stunning alpine mountains interspersed with vast deserts hold an abundance of coal, copper and other natural resources used in high-tech manufacturing.
The question of who benefits from the wealth has been a key issue since Mongolia began negotiating with foreign mining giants — rumors of secret deals and under-the-table payments have circulated for years.
After Mongolia threw off Communism at the end of the Cold War, it lost generous Soviet Union aid packages. Since then, it has been slowly becoming a democracy but is struggling to avoid falling into debt while holding Chinese and Russian interests at bay.
China is a particularly important neighbor as its ruling Communist Party buys up 92% of Mongolia’s exports.
A ‘spiders’ web’ of the greedy
Over the years, the capital of Ulaanbaataar transformed itself from a city of clunky Soviet-era buildings surrounded by traditional herders’ felt tents known as gers, into a metropolis of shopping malls and fancy hotels.
The protesters have said the country’s mineral riches have benefited business interests and the wealthy, while many Mongolians still live in poverty.
Early on Tuesday morning, Oyun-Erdene only got 44 votes of support in the 126-seat legislature — the State Great Khural — well short of the 64 needed, according to the head of the counting commission, M. Narantuya-nara.
Oyun-Erdene accepted defeat, saying it had been an honor to serve the nation through the coronavirus pandemic, Russia’s war on Ukraine and the ongoing strife over U.S. tariffs.
But he also warned of the threat of a “spider’s web” of special interests that he said are working to hold the Mongolian people back.
What happens next?
Oyun-Erdene, who ran a coalition government, will remain prime minister until his replacement is elected in parliament, most likely from the ranks of opposition lawmakers.
Those who pick his successor will likely also have to find a platform that will satisfy the demands of the largely young and well-educated class that has led the protests. That could include moving ahead with a national sovereignty fund introduced recently to better help spread the wealth.
In stepping down, Oyun-Erdene defended his integrity but said he had made the mistake of “paying insufficient attention to social and internal political matters.”
He also warned of political instability ahead, saying it “could lead the public to lose faith in parliamentary rule and potentially put our democratic parliamentary system at risk of collapse.”
What do experts and the ordinary people say?
Erin Murphy, deputy director and senior fellow of India and emerging Asian economics at the Center for Strategic and International Studies, said it’s not easy to “build that foundation for democracy” at a time when Mongolia also must tackle economic problems.
Julian Dierkes, a Mongolia expert at the University of Mannheim in Germany, said he doesn’t expect any major policy changes, whoever becomes the next prime minister.
“They will be selected on the basis of personal networks and patronage,” Dierkes said.
Many people on the street seemed worried for the future and some defended the outgoing prime minister on Tuesday.
Oyun-Erdene should not be responsible for his son’s failings, said Gansukh Batbayar, a military retiree in Ulaanbaatar who lauded what he described as Oyun-Erdene’s efforts to “confiscate illegally earned assets and money of corrupt officials” and distribute it more fairly.
“We barely survive in these chaotic times and our pensions are very small,” said an older woman on a public bus in Ulaanbaataar, who declined to give her name to speak about the political developments.
She counts on her children “to have food to eat and a roof over my head,” she said.
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Associated Press writers Didi Tang in Washington and Ken Moritsugu in Beijing contributed to this report.

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Why Mongolia’s Prime Minister Resigned www.time.com

Oyun-Erdene Luvsannamsrain became Mongolia’s Prime Minister in 2021, after gaining prominence by helping to organize mass protests against corruption. Now, after protesters have taken to the streets accusing him of corruption, which he has denied, he’s resigned.
Oyun-Erdene lost a vote of confidence in parliament on Monday, according to a parliamentary statement, failing to secure a majority 64 votes in the 126-seat body. Only 82 lawmakers voted in the secret ballot, which yielded only 44 in approval of Oyun-Erdene.
“It was an honour to serve my country and people in times of difficulties, including pandemics, wars, and tariffs,” Oyun-Erdene said after the vote.
Oyun-Erdene, whose center-left ruling Mongolian People’s Party retained a majority but formed a coalition with opposition parties anyway after legislative elections last year, will remain as caretaker Prime Minister until his successor is appointed within 30 days. 
His resignation, fueled by discontent over his family’s apparent lavish spending and luxurious lifestyle, marks the latest political upheaval in the Asian nation’s longstanding fight against corruption. 
The mineral-rich landlocked country, sandwiched between autocratic giants China and Russia, has been a hotbed of predatory behavior by business elites, while more than a quarter of the country’s 3.5 million population is mired in poverty.
The no-confidence vote means the coalition government will cease to exist, though the Mongolian People’s Party should be able to form a new government.
Oyun-Erdene told TIME in an interview in January that he formed the coalition government to try to overcome Mongolia’s inertia due to politicization. “As a small kid, I looked forward to my country’s development,” he said, “and there have been some projects that people discussed at that time, but still no progress has been made because of political divisions.”
Here’s what to know.
What were the accusations?
This year, antigovernment protests began as early as January. But the Prime Minister faced a new wave of criticism in May stemming from a controversy surrounding his 23-year-old son Temuulen, whom Asia-Pacific commentary outlet The Diplomat reported was recalled from his studies at Harvard University “due to corruption investigations.” Social media reports of Temuulen gifting his now-fiancée luxury items—including, according to CNN, “helicopter rides, an expensive ring, designer handbags and a luxury car”—angered the public.
Protest group Ogtsrokh Amarkhan circulated a petition that got more than 59,000 signatories calling for Oyun-Erden to leave his post, listing his son’s lavish spending as only one of the reasons why. The group also cited inflation and price increases, growing unemployment, and poverty. 
Protesters also called for Oyun-Erdene to release his finances.
How did Oyun-Erdene respond?
Oyun-Erdene’s office has mainly called the allegations of financial impropriety a “smear” and “completely unfounded.” In a statement to CNN, the office said that the Prime Minister “makes regular financial declarations annually in line with Mongolian law.”
Following demands to resign in May, the Prime Minister spoke to local media in defense of his son. Researcher Bolor Lkhaajav reported for The Diplomat that Oyun-Erdene’s son did not ask for financial support from his father and that Mongolia’s Anti-Corruption Agency was looking into the controversy. Oyun-Erdene even reportedly offered to resign without protest if the agency discovered irregularities in his financial statement.
Oyun-Erdene warned before the confidence vote that a change in government could threaten Mongolia’s fragile democracy, which only started in the early 1990s after the Soviet Union collapsed. “If governance becomes unstable, the economic situation deteriorates, and political parties cannot come to consensus. It could lead the public to lose faith in parliamentary rule and potentially put our democratic parliamentary system at risk of collapse,” the Prime Minister said. While defending himself, he acknowledged that he was “dedicating too much time to major projects while paying insufficient attention to social and internal political matters.”
How bad is corruption in Mongolia? 
Mongolia ranks 114 of 180 countries and territories in Transparency International’s Corruption Perceptions Index.
The 2024 Freedom House’s Freedom in the World index describes corruption, particularly involving the mining industry, as “endemic in Mongolia” and said the problem is widely perceived to “have worsened in recent years.” According to Freedom House, the country’s anticorruption laws “are vaguely written and infrequently enforced”, while anticorruption authorities have been “criticized as ineffective in pursuing cases.”
In 2024, U.S. prosecutors sought the forfeiture of former Prime Minister Batbold Sükhbaatar’s two luxury apartments in New York City after they were found to have been purchased using the proceeds of “unlawfully awarded Mongolian mining contracts.” And in 2022, a coal theft case involving minerals being illegally transported across the Chinese border rocked Mongolia, entangling high-ranking officials and business leaders and resulting in an estimated loss of $12 billion to the economy.
by
Chad de Guzman

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Mongolia PM resigns after son's luxury holiday stirs public fury www.bbc.com

Mongolia's prime minister has resigned after social media photos of his son's lavish lifestyle sparked an anti-corruption investigation and weeks of mass protests.
Luvsannamsrain Oyun-Erdene, who has denied wrongdoing, lost a confidence vote in parliament on Tuesday.
The viral photos purport to show Oyun-Erdene's son and the son's girlfriend flaunting a black Dior shoulder bag and several shopping bags while on their engagement holiday.
Protesters questioned how Oyun-Erdene's family could afford such luxurious living. Local media reported that the country's anti-corruption body had been looking into their finances.
The photo of the Dior bag, reportedly posted by the girlfriend, had the caption: "Happy birthday to me". Another photo purportedly showed the couple kissing in a swimming pool.
The images have been shared on social media and published by local media.
During Tuesday's confidence vote, 44 of the 88 lawmakers who took part in the secret ballot voted for Oyun-Erdene, while 38 others voted against him. He needed the support of at least 64 of parliament's 126 members.
"It was an honour to serve my country and people in times of difficulties, including pandemics, wars, and tariffs," he said after the vote.
Hundreds of protesters, many of them young people, had been taking to the streets for two weeks before the vote, demanding Oyun-Erdene's resignation.
Oyun-Erdene has rejected allegations of corruption, accusing critics of launching a smear campaign against him.
According to Transparency International, Mongolia has seen worsening corruption since Oyun-Erdene came into power. Last year, it was ranked 114th out of 180 countries in terms of government transparency.
A former communist state sandwiched between Russia and China, Mongolia has been transitioning to democracy since the fall of the Soviet Union in the early 1990s.
Corruption is a persistent problem. Last year, US prosecutors sought to forfeit former Mongolian PM Sukhbaatar Batbold's two New York apartments that he allegedly bought using stolen mining funds.
Batbold, who served from 2012 to 2015, denied wrongdoing.
In recent years, Mongolia has sought to build closer ties with the West, counting the United States and European countries as part of its "third neighbour" foreign policy.
BY Stuart Lau

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Mongolian PM ousted amid corruption protests www.aljazeera.com

Mongolian Prime Minister Luvsannamsrain Oyun-Erdene has resigned after losing a vote of confidence amid weeks of anticorruption protests.
Oyun-Erdene announced his resignation on Tuesday after Parliament failed to back him in a confidence vote the previous day, a parliamentary statement said.
Public frustration has been boiling over regarding the lavish lifestyle of the prime minister’s family, leading to persistent demonstrations in the capital, Ulaanbaatar.
“It was an honour to serve my country and people in times of difficulties, including pandemics, wars, and tariffs,” Oyun-Erdene said after the result of the secret ballot was announced to Parliament.
Oyun-Erdene, who spent more than four years in office, had denied the corruption allegations against him. In an address to Parliament before the vote, he blamed “major, visible and hidden interests” for waging an “organised campaign” to bring down the government.
He had also warned that political instability and economic chaos would follow should he be forced out of power.
But his pleas did not convince the Parliament, with only 44 lawmakers backing him and 38 against.
The prime minister needed to reach a 64-vote threshold in the 126-seat Parliament.
Oyun-Erdene, who took the prime minister’s seat in January 2021 and was re-elected in July 2024, will remain in a caretaker capacity. A successor must be named within 30 days.
The landlocked democracy in Northern Asia has faced deep-seated corruption for decades, with many arguing that wealthy elites are hoarding the profits of a years-long coal mining boom.
On Monday, hundreds of young people converged on the square outside the parliament building, marching with white placards and chanting: “Resignation is easy.”
Several protesters said they had come to voice dismay at what they have described as deeply embedded corruption and social injustice.
Since Oyun-Erdene took power, Mongolia’s ranking in Transparency International’s Corruption Perceptions Index has dropped.
Concerns over the economy and rising living costs have also stoked the unrest.
Source: Al Jazeera and news agencies

 

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The Bank of Mongolia Purchases 1014.3 Kilograms of Precious Metals in May www.montsame.mn

The Bank of Mongolia purchased 1,014.3 kilograms of precious metals in May 2025, representing a decrease of 0.83 percent compared to the previous month.
Compared to the same period in 2024, the amount of precious metals purchased by the Bank of Mongolia decreased by 29.3 percent. Since the beginning of 2025, the Darkhan-Uul Branch of the Bank of Mongolia has purchased 171.9 kilograms of precious metals, while the Bayankhongor Branch bought 711.0 kilograms.
Notably, the average price for purchasing gold in the past month was MNT 376,606.51 per gram.

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Base Tariff for the Transportation of Petroleum Products by Rail to Be Halved www.montsame.mn

The Ministry of Road and Transportation of Mongolia issued a regulation to reduce the base tariff for the transportation of petroleum products on the "Sukhbaatar-Zuunbayan-Tsogttsetsii-Tavantolgoi" by 50 percent.
Director of the Railway and Maritime Transport Policy of the Ministry of Road and Transportation of Mongolia Kh. Itgelt said, "The regulation has been notified to the "Ulaanbaatar Railway," "Mongolian Railway," and "Tavantolgoi Railway" companies. The reduced tariff will come into effect soon. So, we urge fuel importers and transport companies to adhere to weight standards of freight, ensuring the safety public and local railroads."
Moreover, the Ministry of Road and Transportation plans to establish hazardous cargo storage tanks and load-unload areas in connection with the establishment of fuel reserves in the Gobi region. In this context, discussions are underway with aimag and local Governors to provide support to business entities and organizations and resolve land issues within the framework of laws and regulations.

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Fire breaks out in generator at TPP-3 www.gogo.mn

On June 2, 2025, a fire broke out at Thermal Power Plant No. 3 (TPP-3), located in the 3rd khoroo of Khan-Uul District. The emergency services received the call at 00:25.
Multiple emergency response teams were dispatched to the scene, including units from the National Emergency Management Agency (NEMA), the Capital Emergency Department, the Capital Rescue Unit, as well as emergency units from Khan-Uul, Chingeltei, Bayangol, Songinokhairkhan, and Bayanzurkh districts. The Information and Rapid Control Center also participated in the coordinated response.
The fire occurred in Turbine No. 9 of the high-pressure workshop, which spans an area of 50x230 meters. The generator involved is a critical component of the power plant, responsible for converting thermal energy into electrical energy. Emergency teams successfully extinguished the fire, which had affected the generator, east wall, and roof of the turbine section.

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Mongolia PM Faces Likely Confidence Vote Amid Corruption Claims www.afp.com

Mongolia's parliament is expected to vote Monday on whether to keep its fracturing coalition government in office, following protests against the country's embattled prime minister over alleged corruption.
The landlocked democracy in northern Asia has struggled with corruption for decades, and many in the country say a wealthy elite is hoarding the profits of a years-long coal mining boom at the expense of the general population.
Those tensions resurfaced last month after reports of allegedly lavish spending by the son of Prime Minister Luvsannamsrain Oyun-Erdene sparked days of protests in the capital Ulaanbaatar.
Oyun-Erdene is due to address the State Great Khural -- the Mongolian parliament -- on Monday ahead of a "confidence vote" to decide whether the government he heads should continue, according to the prime minister's office.
It would mark the first time a Mongolian prime minister has submitted a confidence motion in their own government and raises the spectre of Oyun-Erdene's resignation if he loses.
Mongolia has been ruled by a three-way coalition government since elections last year resulted in a significantly reduced majority for Oyun-Erdene's Mongolian People's Party (MPP).
But the MPP evicted the second-largest group, the Democratic Party (DP), from the coalition agreement last month after some younger DP lawmakers backed calls for Oyun-Erdene's resignation.
The move pushed the country's fractious political scene into further uncertainty.
Since Oyun-Erdene took power in 2021, Mongolia has plummeted in Transparency International's Corruption Perceptions Index.
The country has seen frequent unrest, and hundreds of young people protested in Ulaanbaatar last month calling for him to step down.
The allegations against Oyun-Erdene's family have hit a nerve at a time when many in the country are worried about their economic prospects and rising living costs.
The prime minister's office has denied allegations of impropriety -- describing them as a "smear" -- and warned of economic chaos if his government collapses.
Some counter-protesters -- overwhelmingly older than their pro-opposition counterparts -- also turned out to support the prime minister last month.

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Rio Tinto finds its mega-mine stuck between two Mongolian strongmen www.afr.com

Inside Mongolia’s cavernous parliament, politicians huddle in clusters, rushing between benches and locked-door meetings. A historic confidence vote looms over Prime Minister Oyun-Erdene Luvsannamsrai, whose grip on power is slipping amid corruption allegations and a populist backlash – sending tremors through the country’s most important foreign investment: the vast Oyu Tolgoi copper mine run by Rio Tinto.
The ASX-listed giant has already weathered two decades of turbulence in Mongolia. But the current political crisis – compounded by allegations levelled at the company and a fractured government – threatens to derail its most ambitious expansion, a multibillion-dollar underground mine that would make Oyu Tolgoi one of the world’s five biggest copper producers.
In a former socialist country that has transitioned more successfully to democracy than many others, Rio looms as both a lightning rod for government ire and, as the powerhouse of its economy, the first example politicians point to as a successful model for Mongolia’s future growth.
Street vendors in Mongolia. The country is dependent on resources revenues, making Rio Tinto a central player in the drama unfolding in the government. Bloomberg
A secret lawsuit filed by Mongolian authorities against Rio in Britain’s High Court is a case in point. The Australian Financial Review revealed last week that the company had been accused of involvement in a bribery scheme targeting at least two Mongolian politicians between 2008 and 2012.
Rio strongly denies the allegations, which remain sealed, and come at the same time as the company is in a dispute over $647 million in taxes. “Rio’s poor planning and flawed execution caused financial harm to Mongolia,” reads a passage from the Mongolian government’s confidential court filing, which alleges losses between $2 billion and $27 billion.
At the same time as those lawsuits, government members close to Oyun-Erdene insist that there needs to be stability so that companies like Rio aren’t scared away. They argue that it is only through deals like the one for Oyu Tolgoi – Mongolia owns 34 per cent of the project – that the country will be able to unlock its enormous reserves of natural resources.
“It was difficult to deal with Mongolia because leadership changed so frequently. You’d meet someone, then meet someone completely different the next time,” said Odbayar Erdenebileg, a government minister and the chairman of the national committee for monitoring and evaluation.
“But with this coalition, we’ve seen consistency. For example, the border railway issue involved more than 50 meetings over the years, but this time, a unified team quickly signed a memorandum and launched construction.
“Now, that progress is under threat. I believe foreign partners are in a state of shock. If the most inclusive and promising government structure in recent history collapses, it will seriously damage investor confidence.”
The threat Odbayar is talking about is Mongolian President Ukhnaagiin Khürelsükh, whom the government blames for fomenting unrest against Oyun-Erdene, in a bid to stay in power and manoeuvre around term limits which would otherwise mean he would have to leave office. Khürelsükh, a former prime minister, is close to Russia’s Vladimir Putin. Earlier this month, he attended a military parade in Moscow’s Red Square.
Oyun-Erdene is expected to allow a vote of no confidence in his government this week amid a scandal involving his family’s lavish lifestyle. The fiancée of Oyun-Erdene’s 23-year-old son Temuuleni, for instance, has posted pictures of her luxury bags, expensive rings and a Mercedes-Benz, prompting protest in a country where average monthly salaries are little over $1000.
Foreign investors are rattled. Mongolia’s democratic system, established in 1990 after the collapse of the Soviet Union, has withstood three decades of economic and political change, but its institutions remain young.
“It looks like corruption has been increasing, but actually it is just being disclosed more, which shows the democracy is working,” said Jargalsaikhan Dambadarjaa, an economist at the Defacto Institute, an Ulaanbaatar-based think tank. “People in Mongolia know we have these very rich deposits, but the economy is not competitive right now and inflation is high. The people need to see foreign investment translating into their lives.”
Rio arrived in Mongolia in 2006, when it bought 9.95 per cent of Oyu Tolgoi’s previous owner, Ivanhoe Mines. Over time it increased its stake and by 2012 it was the majority owner of the company, eventually renamed Turquoise Hill. It acquired the remainder of Turquoise Hill in 2022.
Oyu Tolgoi is expected to be one of the world’s top five copper producers later this decade, thanks to a seven-year underground expansion project that was completed in 2023 at a cost of $US7.06 billion ($11.11 billion). Ultimately, construction of the underground mine took almost two years longer than expected and cost almost $US1.7 billion more than planned.
The delays and cost blowouts have made Rio an easy target for parliamentarians and pundits in Mongolia, especially when criticism arises of how the government is managing the economy.
Part of the High Court lawsuit revealed by the Financial Review last week is a request for compensation. And the animosity appears to be both ways. The High Court filing also revealed that the Rio subsidiary that owns and operates Oyu Tolgoi demanded the Mongolian government repay $US371.9 million ($580 million) of excess taxes that it claims were wrongly collected by the government, the equivalent of 1.8 per cent of Mongolia’s GDP.
Rio argues that the complexity of the mine, and the size of the resource, requires it to be flexible about the development. Sometimes, that means higher costs and a different timeline to earlier plans.
“Oyu Tolgoi is one of the largest known copper deposits in the world,” said Munkhsukh Sukhbaatar, the managing director of strategy and growth at Rio’s copper division and the former director of Mongolia for the mining company.
“We are continuing to learn things about this deposit, so sometimes plans need to change, which is standard practice for a mining project of this scale and complexity. Rather than just constructing a building, this project is like a mission to Mars. We adjust as we learn more.”
Rio’s position is particularly precarious. The company needs government approval to expand into nearby tenements that would sustain Oyu Tolgoi’s peak output levels. The company has told investors it will reach those levels this year with a 50 per cent increase in production. But the mining licence for the nearby tenements is held by Canada’s Entrée Resources. Rio is waiting for the Mongolian government to approve the licence transfer.
Any freeze in government approvals or parliamentary paralysis could delay those plans by months – and cost hundreds of millions of dollars.
“Both sides are now working to find solutions within international legal frameworks,” said Odbayar, the government minister. “We must protect investor rights without compromising Mongolia’s national interest or the well-being of our people. Discussions are ongoing.”
Before the latest lawsuit, Rio chief executive Jakob Stausholm and the Mongolian government had attempted a public reset of their relationship. The company even waived $2.4 billion in loans owed by the government. Now, not only is Oyun-Erdene’s position in doubt, but Stausholm is leaving Rio, pushed out by the board after four years in the job. The board, it seems, wants someone with more technical experience who will cut costs.
In Mongolia, perhaps Rio’s best hope is the pressure Oyun-Erdene is under. To prop up his stalling government, those close to Oyun-Erdene point to his pro-business economic agenda, which is centred on a long-term development plan that has 14 megaprojects. Officials say it is vital to break Mongolia’s dependency on raw commodity exports and maintain a strong relationship with international money markets.
Five of those projects are moving ahead. These include a new railway link between Mongolia and China – its first in over 70 years – designed to slash freight times. Announced earlier this month, the project gives Mongolia a transport edge over regional rivals like Australia and Indonesia, which face longer shipping routes to Chinese ports. It is unclear who will fund the railway. A long-stalled uranium mining venture with French developers is also under way, as is the construction of a major hydroelectric power station that aims to reduce Mongolia’s dependence on energy imports.
Two other projects are nearing approval: another large-scale hydroelectric station and a long-awaited copper refinery. Officials close to the government’s economic team argue that all these projects have advanced faster than they would have under previous administrations.
“If [Oyun-Erdene] loses, the political chaos and instability will be a problem,” said one government minister who asked for anonymity. “We need to signal to the world that we are stable.”
“This is not the environment for making billion-dollar investment decisions,” said another.

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