Copper Sector Expansion in Mongolia: Opportunities and Challenges

Key messages:

• Copper has long been a pillar of technological and economic progress, and its importance continues to grow with the global energy transition. Its unique properties make it essential for renewable energy technologies, electric vehicles (EVs) and modern power grids.
• The increasing demand for decarbonization presents a significant opportunity for Mongolia, with its vast copper reserves, to strengthen its position as a key player in the global copper value chain
• Mongolia’s copper production is currently anchored by two major projects—the Erdenet mine and the Oyu Tolgoi mine—both producing and exporting copper concentrate to China. However, the number of projects in the pipeline remains limited, requiring increased investment in exploration. At the same time, Mongolia exports nearly all of its copper production as raw material or copper concentrate, with limited domestic production of value-added products such as copper cathode.
• To advance new copper exploration, mining and processing projects, the government must provide clear and targeted policy support. This includes setting clear regulations on ownership, taxation regime, environmental standards, transparency and economic benefits. The government should also address the geopolitical risks and opportunities that come with copper production. Additionally, policies should promote the sector's integration with other sectors, while ensuring infrastructure to support the sector’s growth.
• Moving forward, the development of the copper sector’s policy should involve open discussions with multiple stakeholders, ensuring that projects are implemented with public oversight. The government and relevant regulatory bodies must pay particular attention to projects involving state ownership or requiring budgetary funding. As the copper sector expands, it is important to balance economic benefits with environmental protection.