Translated and edited by Arctus Analytics. The views expressed in this article are those of the author and do not necessarily reflect the position of Arctus Analytics.
A group of Members of Parliament have turned Government Resolution No.55 into a political storm that has dominated the week’s headlines and slowed parliamentary proceedings. Yet beyond the politics lies a decision that could determine the stability of Mongolia’s economy for years to come.
Resolution No.55 was designed to correct the mistakes made by the previous administration and support domestic producers. Back in 2021, Finance Minister B.Javkhlan pushed through Government Resolution No.174, which tied mineral royalty calculations (AMNAT) to fixed reference prices. The outcome was damaging: outstanding royalty payments reportedly totaled around 3 trillion MNT, over 20 factories suspended operations, and about 1,500 workers lost their jobs. Families saw incomes shrink, and domestic processing all but froze.
Resolution No.55 aims to unblock this situation by moving from fixed reference prices to actual market-based prices, ensuring companies are not taxed on revenue they never earned. Even as global coal and mineral prices dropped by over 40 percent, Mongolia’s tax rates stayed unchanged, an imbalance that hurt competitiveness and discouraged investment.
A Broader Economic Context
Every country today is navigating economic uncertainty and geopolitical tension. Governments worldwide are focused on protecting jobs and keeping their industries alive. Mongolia should be no different. Yet when our state takes steps to support the private sector, skepticism too often replaces dialogue.
Some politicians have claimed that Resolution No.55 will cost the state 200 billion MNT in lost revenue. However, these figures were presented without clear analysis or supporting data. In contrast, the Ministry of Mining and Heavy Industry estimates that basing mineral royalties on exchange-traded prices could increase annual revenue by about 100 billion MNT while creating a fairer, more transparent taxation system.
This is not simply about miners’ profits. It is about establishing stable, predictable rules that allow both the state and private enterprises to plan and invest with confidence.
Mining’s Role in Public Finances
Last year alone, Mongolia’s mining sector contributed approximately 10.3 trillion MNT to the state budget, the bulk of our education, healthcare, and social programs. Without mining, the state’s commitments to raise teachers’ and doctors’ salaries would be nearly impossible to fulfill.
Seen in that light, Resolution No.55 is not a favor to industry but a safeguard for national stability. It maintains the fiscal base that keeps public services running and helps prevent the country from sliding back into economic stagnation. A strong, transparent mining sector is the bridge between fiscal sustainability and social progress.
Lessons from Oyu Tolgoi
Mongolia’s experience with Oyu Tolgoi is a vivid reminder of what happens when politics takes precedence over good policy. When the investment agreement was signed, Mongolia expected to receive up to 53 percent of the project’s lifetime economic returns. In reality, our effective share today is closer to 27 percent, a result of complex financing structures and accumulated debt obligations.
The Zandanshatar government began discussions to improve the OT agreement and ensure that strategic deposits, including those operated by national companies, deliver tangible benefits to citizens. Yet as these talks progressed, politics again took center stage. The returns once expected around 2023 are now projected for the mid-to-late 2030s, which means another decade lost to political indecision and mistrust. 
These experiences highlight the cost of uncertainty. Frequent politicization of strategic economic decisions undermines confidence, delays benefits, and weakens Mongolia’s bargaining position in future resource projects. If this pattern continues, Mongolia risks repeating its biggest policy mistake: turning long-term economic opportunities into short-term political battles.
Policy Choices Ahead
If we are serious about sharing the benefits of our natural resources, the focus should not be on taking larger stakes in projects we cannot afford to finance. Instead, the state should collect mineral royalties transparently, without taking on operational risk, and channel it into the Wealth Fund for all citizens to benefit from.
Rather than fighting over who controls 34 percent of a project, we should ensure that every percentage collected in taxes and royalties is used wisely and publicly. This is how resource wealth turns into real, lasting value: through governance, not ownership.
Conclusion
Government Resolution No.55 represents more than a temporary controversy in Parliament. It reflects Mongolia’s ongoing struggle to balance politics with policy, and populism with pragmatism.
Whether one agrees or disagrees with the government’s approach, one fact remains: stable and transparent tax policy is essential for national progress. The move to link mineral royalties to actual market prices may not solve every challenge, but it points in the right direction toward fairness, transparency, and a stronger foundation for both business and public welfare.
By U.Orgilmaa