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Mongolia's resource wealth, in numbers

Laws and rules

The laws, regulations, international treaties and standards that decide who owns Mongolia's resources and who gets what. What each does, its key provisions, and why it matters to citizens.

Plain-language summaries, not legal advice. Check the official text on legalinfo.mn before relying on any provision.

The layers of rules: who sets what
  1. 01International commitmentsTreaties, conventions and standards Mongolia has joined: EITI, the WTO, investment treaties, arbitration, tax treaties.
  2. 02ConstitutionThe subsoil belongs to the people; most of the benefit from strategic deposits goes to the people.
  3. 03LawsPassed by Parliament: the Minerals, Petroleum, Investment, tax and wealth fund laws.
  4. 04Regulations and resolutionsGovernment and ministries: royalty prices, licensing rules, model contracts.
  5. 05Contracts and licencesDeposit by deposit: investment agreements, production sharing contracts, local agreements.

Ownership and benefits

ConstitutionIn force1992; 2019

Constitution of Mongolia, Article 6

Declares that land, the subsoil, water, forests and natural resources belong to the people and are protected by the state. A 2019 amendment says most of the benefit from strategic deposits must go to the people.

Key provisions

  • 2019 amendment (Article 6.2): most of the benefit from strategic deposits goes to the people, through a national wealth fund.
  • 'Benefit' is read to include taxes, fees and dividends.
  • How the 'majority' is measured is still not settled.

Why it matters to citizens

The highest legal basis for citizens' share. Defining the 'majority' in numbers, and checking it every year, is at the core of the standard we propose.

TermsStrategic depositA deposit Parliament declares important enough to affect national security or the economy, giving the state the right to a share.Under the Minerals Law, a deposit can be called strategic if it affects national security or economic development, or could produce more than 5% of GDP. Parliament makes the designation on the government's proposal.Full explanation →

Sources

LawsIn force1997; 2006; 2014; 2024

Minerals Law

The main law on exploration and mining licences, strategic deposits, state participation and royalties.

Key provisions

  • Parliament designates strategic deposits on the government's proposal (8.1.4): 15 in 2007, a 16th in 2015.
  • The state may own up to 50% where it funded exploration, otherwise up to 34% (5.4–5.5).
  • Holders of strategic deposit licences must sell at least 10% of their shares through the Mongolian Stock Exchange (5.6).
  • Royalty: 5% of sales value for most products; 2.5% for coal sold at home for energy (47.3).
  • Licence holders must sign agreements with local authorities on environment, infrastructure and jobs (42.1).
  • 2024 amendments: private owners of strategic deposits capped at 34%, with at least 34% transferred to the state without compensation; investors call this expropriation.

Why it matters to citizens

Sets who owns what and how much the state takes. Citizens' share starts here.

TermsStrategic depositA deposit Parliament declares important enough to affect national security or the economy, giving the state the right to a share.Under the Minerals Law, a deposit can be called strategic if it affects national security or economic development, or could produce more than 5% of GDP. Parliament makes the designation on the government's proposal.Full explanation →RoyaltyA payment to the state for the right to extract a resource, usually a share of the value sold.Minerals belong to the people, so a miner pays for every tonne it takes out. Royalties are paid whether or not the company makes a profit, which makes them a reliable source of state income.Full explanation →

Sources

Drafts and proposalsDraft2026

Draft revised Minerals Law

Submitted to Parliament by the government on 26 May 2026; Parliament has agreed to consider it.

Key provisions

  • A definition and list of critical minerals.
  • A separate licence for processing plants (5 years, renewable for 5).
  • Mine closure plans updated every 3–5 years, with closure funds secured.
  • A 2.5% royalty on coal sold at home for energy; extra royalty when copper is above US$9,000 a tonne (2.5% for refined product, 5% for concentrate, 15% for ore).

Why it matters to citizens

A rewrite of the law is a policy window: provisions on citizens' share and disclosure can be added now.

TermsRoyaltyA payment to the state for the right to extract a resource, usually a share of the value sold.Minerals belong to the people, so a miner pays for every tonne it takes out. Royalties are paid whether or not the company makes a profit, which makes them a reliable source of state income.Full explanation →

Sources

Drafts and proposalsBeing prepared2026

Planned law guaranteeing 60% of strategic-deposit benefits to citizens

In 2026 a directive called for a law setting state ownership shares and special royalties by mineral type, with at least 60% of the benefit guaranteed to citizens.

Key provisions

  • Proposes an adjustment payment if the benefit falls short of 60%.
  • Investors report the state informally claiming a right to 60% of revenue from strategic deposits.

Why it matters to citizens

The first attempt to fix citizens' share as a number. How it is calculated and checked will decide whether it works.

TermsStrategic depositA deposit Parliament declares important enough to affect national security or the economy, giving the state the right to a share.Under the Minerals Law, a deposit can be called strategic if it affects national security or economic development, or could produce more than 5% of GDP. Parliament makes the designation on the government's proposal.Full explanation →

Sources

LawsIn force2024

Law on the National Wealth Fund

Created the Chinggis Khaan national wealth fund with three parts: the Future Heritage Fund, the Development Fund and the Savings Fund.

Key provisions

  • Savings Fund: 34% of the dividends the state receives from state mining companies, with an account for every citizen.
  • Development Fund: 50% of the extra revenue when mineral prices are high.
  • Future Heritage Fund: residual royalty payments.
  • On 27 May 2026 the cabinet approved merging the fund and Erdenes Mongol into the Chinggis Khaan Sovereign Wealth Fund Corporation.

Why it matters to citizens

The main channel for resource income to reach citizens; how much goes in, and when it can be used, depends on this law.

TermsSovereign wealth fundA state-owned investment fund, often built from resource income.It turns a resource that will run out into financial assets that can last indefinitely. A fund can save for future generations, steady the budget when prices fall, or pay citizens directly.Full explanation →Savings FundThe part of Mongolia's wealth fund that holds an account for every citizen.Money from state mining dividends and special royalties is credited to each citizen's personal account. It is meant for housing, education and healthcare, and cannot be used until 2030.Full explanation →

Sources

Investment and labour

LawsIn force2013; 2024

Law on Investment

The general framework for all investors, domestic and foreign.

Key provisions

  • A foreign investor holding 25% or more must invest at least US$100,000.
  • Its tax stabilisation provisions do not match the tax laws, so they are not applied.
  • In 2024 Parliament removed a clause on obtaining land rights.

Why it matters to citizens

It promises investors stability, but weak implementation erodes trust.

Sources

RepealedRepealed2012–2013

Strategic Entities Foreign Investment Law (SEFIL)

Restricted foreign investment in strategic sectors; repealed in 2013.

Key provisions

  • Investors link it to a fall of more than 50% in foreign direct investment between 2012 and 2013.

Why it matters to citizens

A lesson in how sudden rule changes can stop investment.

TermsForeign direct investment (FDI)Money a foreign company invests to own or build a business in another country.Unlike buying a few shares, FDI means a lasting stake (usually 10% or more) and some control, such as building a mine or a factory.Full explanation →

Sources

Tax and budget

RepealedRepealed2006–2011

Windfall profits tax

A 68% tax on copper and gold concentrate prices above set thresholds.

Key provisions

  • It aimed to encourage smelting at home: smelted products were exempt.
  • Its repeal was a precondition for the Oyu Tolgoi agreement; in return the project paid higher royalties.

Why it matters to citizens

Shows both a way to capture high-price profits for the state, and the risks of doing it badly.

TermsResource rentThe profit from a natural resource above its costs and a normal return.When copper sells for far more than it costs to dig up, including a fair return on the investment, the surplus is the rent. It exists because nature made the deposit, not because of anyone's effort, which is why many countries treat it as belonging to the public.Full explanation →

Sources

LawsIn force2019–2020

Tax laws

The General Tax Law, corporate income tax, VAT and related laws.

Key provisions

  • 10% VAT, 5% import duty, and a 20% withholding tax on payments sent abroad.
  • Since 2020, a disputed tax assessment must be paid into escrow in full before it can be contested.
  • Individuals pay 10% tax on dividends.

Why it matters to citizens

Most of the money mining companies pay the budget comes through taxes.

TermsDividendThe part of a company's profit paid out to its shareholders.When a company makes a profit, its board can decide to pay part of it to the owners, in proportion to the shares each holds.Full explanation →Budget revenueAll the money the state collects in a year: taxes, royalties, fees, dividends and more.It pays for schools, hospitals, pensions, roads and salaries. Comparing it with GDP shows how big the state's income is relative to the economy.Full explanation →

Sources

LawsIn force2010

Fiscal Stability Law

Sets fiscal rules: a debt limit, a budget balance rule and a limit on spending growth.

Key provisions

  • The rules have been changed several times (most recently in 2016, as of 2018).
  • Created a Fiscal Stability Council.

Why it matters to citizens

The rules meant to protect the budget when commodity prices fall, by saving in good years.

TermsBudget revenueAll the money the state collects in a year: taxes, royalties, fees, dividends and more.It pays for schools, hospitals, pensions, roads and salaries. Comparing it with GDP shows how big the state's income is relative to the economy.Full explanation →Resource curseThe pattern where resource-rich countries grow slower or are governed worse than expected.Large resource income can weaken institutions, feed corruption, crowd out other industries and make budgets swing with commodity prices. It is a tendency, not a law: Norway, Botswana and Chile show it can be avoided.Full explanation →

Sources

International commitmentsIn force

Double tax treaties

Treaties that stop the same income being taxed twice in two countries.

Key provisions

  • In force with 26 countries (2025).
  • There is no tax treaty with the United States.

Why it matters to citizens

Treaty terms can lower withholding tax on dividends and interest paid abroad, which affects budget revenue.

TermsGross national income (GNI)The income that belongs to a country's residents, wherever it is earned.GNI starts from GDP, adds the income residents earn abroad, and subtracts the income paid to foreigners: profits sent home by foreign owners, interest paid to foreign lenders, and wages of foreign workers.Full explanation →

Sources

Petroleum

LawsIn force2014

Law on Petroleum

Governs prospecting, exploration and production of petroleum, and sets licence fees, royalties and a cap on cost oil.

Key provisions

  • A model production sharing contract was approved by Government Resolution 104 in 2015.
  • The National Security Council reviews draft contracts, and the government approves them.
  • A separate Law on Petroleum Products (2005) covers fuel imports, sales and storage.

Why it matters to citizens

Mongolia exports its crude and imports almost all its fuel; the contract terms decide the state's share.

TermsProduction sharing contract (PSC)A deal in which an oil company pays the costs and then splits the oil with the state.The company explores and produces at its own risk. Once oil flows, it first keeps some oil to recover its costs ('cost oil'), and the rest ('profit oil') is shared with the state at agreed percentages.Full explanation →

Sources

Land and environment

LawsIn force2009

Law prohibiting mineral exploration and mining at river headwaters, water protection zones and forests (the 'Long Name Law')

Bans exploration and mining at river headwaters, in water protection zones and in forests.

Key provisions

  • Often cited as one of the factors that weakened investor confidence.

Why it matters to citizens

Sets the balance between protecting water and pasture and developing mines.

Sources

Transparency and integrity

LawsIn force2014

Glass Account Law

Requires public bodies at every level, and state companies, to publish their spending.

Key provisions

  • Makes it possible to study the transactions of state-owned mining companies.

Why it matters to citizens

A tool for citizens to check where state companies' money goes.

TermsState-owned enterprise (SOE)A company the state owns in full or in majority.It lets the state run a business directly and keep its profit, instead of only taxing private firms. Results depend heavily on governance: who appoints the board, how open the accounts are, and whether politics drives decisions.Full explanation →

Sources

LawsIn force2006; 2023

Anti-Corruption Law

Sets criminal penalties for corruption and requires officials to declare assets and income.

Key provisions

  • 2023 amendment: senior officials and close associates may not hold executive posts in state companies or receive concessional loans or grants while in office.
  • Enforcement is considered inconsistent.

Why it matters to citizens

The legal shield against resource money being lost to corruption.

Sources

International commitmentsMember

Extractive Industries Transparency Initiative (EITI)

The global standard for publishing and reconciling what companies pay and what governments receive. Mongolia is one of its early members.

Key provisions

  • 2022 Validation: overall score 70, 'moderate'.
  • Progress noted on contract disclosure and beneficial ownership; declining government and industry engagement flagged.
  • The next Validation began on 1 January 2025.

Why it matters to citizens

An international commitment to make public what each mine pays.

TermsExtractive Industries Transparency Initiative (EITI)A global standard requiring countries to publish what mining, oil and gas companies pay and what governments receive.Companies report what they paid, the government reports what it received, and an independent administrator compares the two. Mongolia was one of the early countries to join.Full explanation →

Sources

Trade

International commitmentsIn force2016–2026

Trade agreements

Mongolia's main trade agreements.

Key provisions

  • Japan–Mongolia Economic Partnership Agreement (in force since 2016).
  • Asia-Pacific Trade Agreement (APTA, joined 2021).
  • Interim agreement with the Eurasian Economic Union: signed June 2025, in force since July 2026.
  • A free trade agreement with Korea under negotiation since 2023.

Why it matters to citizens

About 90% of exports go to China; new agreements are a chance to widen the market.

TermsTrade balanceExports minus imports.If a country sells more abroad than it buys, it has a trade surplus; if it buys more, a deficit.Full explanation →

Sources

Dispute settlement

LawsIn force

Arbitration Law

Based on the UNCITRAL model law.

Key provisions

  • Awards can be appealed once, to the Civil Court of Appeals, which may reject them only for serious procedural failings or conflict with public policy.

Why it matters to citizens

Determines how disputes between investors and the state are resolved.

TermsInvestor–state arbitration (ISDS)A way for a foreign investor to sue a state before an international tribunal instead of national courts.Investment treaties and contracts often let investors take disputes to arbitrators, for example at the World Bank's ICSID centre. Awards can order a state to pay compensation.Full explanation →

Sources

International commitmentsIn force

Bilateral investment treaties

Treaties that protect foreign investors and let disputes go to international arbitration.

Key provisions

  • UNCTAD lists 36 bilateral investment treaties in force.
  • The 1997 US–Mongolia treaty provides for binding third-party arbitration.

Why it matters to citizens

If the rules change suddenly, the country can lose international arbitration and have to pay compensation.

TermsInvestor–state arbitration (ISDS)A way for a foreign investor to sue a state before an international tribunal instead of national courts.Investment treaties and contracts often let investors take disputes to arbitrators, for example at the World Bank's ICSID centre. Awards can order a state to pay compensation.Full explanation →

Sources

International commitmentsParty

ICSID Convention

The convention for settling disputes between states and foreign investors at the World Bank's centre; Mongolia is a party.

Key provisions

  • Mongolia has lost several arbitrations and paid after negotiation.

Why it matters to citizens

Decisions that break contracts or treaties can become expensive internationally.

TermsInvestor–state arbitration (ISDS)A way for a foreign investor to sue a state before an international tribunal instead of national courts.Investment treaties and contracts often let investors take disputes to arbitrators, for example at the World Bank's ICSID centre. Awards can order a state to pay compensation.Full explanation →

Sources

Financial standards

International commitmentsMember

Anti-money laundering standards (FATF)

International standards against money laundering and terrorist financing.

Key provisions

  • Mongolia was put on the 'grey list' in 2019 and removed in October 2020.

Why it matters to citizens

Requires mining money and real owners to be traceable; returning to the list would hurt banks and investment.

Sources

International commitmentsUsed in practice

International resource reporting codes (JORC, NI 43-101)

Foreign-listed companies report Mongolian deposits under Australia's JORC or Canada's NI 43-101 codes. Mongolia's professional institute has been working toward membership of CRIRSCO, which brings these codes together.

Why it matters to citizens

The value of a deposit, and of the state's share in it, starts with a reliable resource estimate.

Sources

Laws on environmental impact assessment, water, companies and the securities market are being added as their provisions are sourced.

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