Mongolia’s extensive mineral wealth, proximity to major markets like China and low labor costs make it attractive for foreign mining and infrastructure investment. The government actively courts FDI with tax breaks and project support.
Greenfield exploration remains lucrative with major untapped deposits. Existing mega mines also seek investors to expand output. Expectations are high for continued foreign participation as the mining sector develops further.
Persistent concerns around policy stability, governance issues and infrastructure gaps temper investor enthusiasm. Unpredictable regulatory changes have impacted some projects. Lack of transport routes and energy infrastructure also constrain mine development.
Navigating these operational hurdles requires strong local partnerships and risk management. But if sustained – Mongolia offers significant long-term growth potential across resources, infrastructure buildout and associated construction, logistics and services.
Mongolia presents both opportunities and challenges for foreign investment. The country’s mining sector is a major driver of economic growth, accounting for approximately 22% of its GDP and over 80% of its exports. The mining industry has attracted significant foreign investment, particularly from China, Canada, and Europe.
The heavy reliance on the mining sector has made the country vulnerable to fluctuations in the global mining industry, and the rapid expansion of the mining industry has raised concerns about its environmental and social impacts. Mongolia is working to diversify its economy and attract foreign investment in other sectors such as: tourism and agriculture. The country has established a Sovereign Wealth Fund and is actively promoting foreign investment. However— Mongolia still faces significant challenges in attracting foreign investment which is including – bans on foreign firms owning land, underdeveloped capital markets, logistical barriers and limited access to credit; especially for small and medium-sized enterprises.
Mongolia’s economic outlook is relatively positive in the medium term, given the recently completed underground expansion of the Oyu Tolgoi copper mine. The government is committed to enhancing the investment climate and attracting foreign investment to support economic growth and development.