As global competition for critical minerals intensifies, Mongolia finds itself falling behind despite its significant mineral wealth. While peer nations are actively securing large-scale investments, Mongolia’s window to attract comparable capital is narrowing, largely due to its own policy environment.
Mongolia’s economy is heavily dependent on mining, with coal and copper serving as its backbone. Foreign direct investment in the sector has been volatile and concentrated in just a handful of flagship projects, most notably Oyu Tolgoi. Without comparable new investments, the country’s economic foundation risks eroding over time.
The root of the problem lies in the framework governing strategic deposits, a designation introduced in the 2006 Minerals Law that allows the state to acquire up to a 34–50% stake in certain mining projects. Over the years, a series of policy missteps has worsened the investment climate: the 2009 Long Name Law, the 2012 Strategic Entities Foreign Investment Law, the 2019 constitutional amendment, and the 2024 Minerals Law amendments have all compounded investor concerns.
Currently, 16 deposits are officially designated as strategic, but this list could expand to as many as 63, further alarming investors. Despite the recent proposal to substantially amend the Minerals Law, strategic deposits remain the “elephant in the room” – the central unresolved issue preventing Mongolia from fully capitalizing on the global critical minerals race. Addressing this issue in a timely and meaningful manner is therefore essential.
