Mongolia Draft Law on Supporting Critical Minerals Projects + Minerals Law Amendments Package 2025-26

Mechanism

This two-part legislative package is the third and final element of Mongolia's critical-minerals statecraft triangle, alongside the April 2024 Sovereign Wealth Fund Law + Minerals Law amendments (ownership architecture) and Government Resolution 95 / February 2025 (state operator vehicle).

Law on Supporting Critical Minerals Projects (Uyanga Bill)

• Critical-mineral list. Introduces a formal statutory definition

of "critical minerals" and empowers the Cabinet to approve and update a list of qualifying minerals aligned with global demand-supply gaps. This mirrors the US Critical Minerals List, EU CRMA strategic raw materials list, and Japan CRM strategy — Mongolia's first domestic equivalent.

• Fast-track exploration licences. Simplified and accelerated

licensing procedures for exploration of Cabinet-designated critical- mineral deposits. This addresses the chronic licence-backlog problem that has stalled geological exploration since the 2006 Minerals Law freeze era.

• Win-Win benefit-distribution principle. Mandates that no less

than 60% of total benefits from designated critical-mineral deposits flow to the public through the National Wealth Fund (the Chinggis Khaan SWF established under the April 2024 SWFL). Replaces the prior free-equity mechanism with a royalty-based AMNAT system tailored to specific mineral types, bypassing lengthy project-by-project negotiations in favour of a unified legal standard.

• State equity decoupled from free extraction. The draft eliminates

the free-equity rule, linking state ownership strictly to actual financial contribution — a significant concession to foreign investors who had resisted the 2024 law's equity-dilution provisions.

Companion Minerals Law Amendments (Cabinet Package)

• Dual-track licensing. Revives both first-come-first-served

applications and tender-based licences for mineral exploration, creating a structured competitive process for high-value deposits alongside open access for frontier exploration.

• Idle-licence fees. Introduces escalating annual fees on dormant

exploration licences to deter speculative licence hoarding — a longstanding complaint from active developers that dormant licence holders block access to prospective ground.

• Critical-mineral alignment. The parent Minerals Law definition

of critical minerals is updated to align with the standalone Uyanga Bill, ensuring regulatory coherence across the licensing, royalty and state-share frameworks.

• Deposit-specific enabling. The package is designed to immediately

enable two projects held up by the current regulatory framework: Tsagaansuvarga (Cu-Mo, Omnogovi aimag) and Kharmagtai (Cu-Au, Omnogovi); and to unlock a further 10+ major projects ready for implementation per MMHI's explanatory memo.

Context: Mongolia's critical-minerals statecraft triangle

Together these three instruments complete the upstream-capture architecture: the SWF law provides the governance and ownership framework, Resolution 95 provides the state operator, and the current bill provides the definitional + licensing + benefit-sharing superstructure under which future CM projects will be developed.

Mongolia's REE endowment

• World's 2nd-largest REE reserves: approximately 22 million

tonnes of rare-earth oxide equivalent (after China at ~44 Mt), concentrated at Khalzan Buregtei, Mushgia Khudag, and Lugiin Gol.

• Current production: ~300 tonnes/year — essentially nil relative

to resource scale.

• 2030 government target: 20,000-60,000 tonnes/year, requiring

significant exploration, infrastructure and processing investment.

• Dependency geography: all export routes transit China (Trans-

Mongolian Railway to Tianjin; road to Erlian/Zamyn-Uud). Non-China corridor alternatives remain conceptual, limiting FEOC-clean supply- chain value for Western buyers until alternative transport infrastructure materialises.

Downstream implications

• FDI signal. The AMNAT royalty-based benefit-sharing model, if

enacted as drafted, removes the free-equity demand that cooled post-2024 investor sentiment. Rio Tinto (Oyu Tolgoi), Tethys Mining (Khotgor), and potential REE JV developers are the primary beneficiaries.

• Supply-chain relevance. A functioning fast-track CM licensing

system could materially accelerate the Khalzan Buregtei and Mushgia Khudag REE projects that are currently stalled in licence/JV structuring, with potential flow-on for EU CRMA third-country strategic-project designations (the 2026 second round of CRMA Article 13 designations covers third-country partners including Mongolia).

• Erdenes Critical Minerals mandate. The SOE designated by

Resolution 95 will become the implementation vehicle for critical- mineral projects designated under this law, creating a single state counterparty for offtake and JV negotiations with G7 buyers.

• Parliamentary risk. The 2024 Minerals Law amendments + SWF Law

passed with significant political debate; the current package relaxes state equity claims, which may face pushback from nationalist parliamentarians. Outcome risk is non-trivial.

Open questions

• Final parliamentary vote timing (Spring 2026 session or deferred to

Autumn 2026).

• Which minerals qualify for Cabinet designation in the first CM list

(likely REE, Cu, Mo, fluorspar, Li, graphite — not yet gazetted).

• AMNAT royalty rate levels by mineral type — the central economic

variable for project economics.

• Whether Tsagaansuvarga and Kharmagtai receive fast-track designation

upon enactment, or require separate cabinet orders.

• Interaction with the proposed US-Mongolia Critical Minerals MOU

(discussed during C5+1 context but not yet confirmed bilaterally).