AGP Executive Report

Mongolia Economy Snapshot: Industrial production jumped 55.9% y/y in H1 2026 to MNT 35.3 trillion, led by mining and quarrying (+68.2%) and manufacturing (+15.4%). Money & Trade: Broad money (M2) rose 26.6% to MNT 53.4 trillion by end-June, while H1 trade hit USD 16.5bn with a USD 4.3bn surplus. Prices & Consumers: Diesel in provincial centers fell to MNT 4,508/l (-MNT 113), but selected essential goods in Ulaanbaatar edged up (+0.9% vs last month). Capital Markets: The Mongolian Stock Exchange saw 10.3m securities traded worth MNT 4.7bn; MSE B led gains while TOP-20 and FTI slipped. Tourism Demand: Foreign arrivals rose 25.7% in first half of 2026, with most visitors entering via Zamiin-Uud and China/Russia the biggest sources. Mining & Business Deals: Erdene reported improved Q2 Bayan Khundii gold output; Mongolia and the EAEU moved ahead with tariff cuts covering 367 product categories. Housing Fraud Crackdown: A working group was set up to investigate housing reservation scams, with MNT 204.9bn in damages reported. Tajikistan Ties: Mongolia and Tajikistan signed 11 cooperation documents and held a business roundtable to expand trade, mining, transport, and education.

IMF Outlook: The IMF’s Article IV mission left Ulaanbaatar warning Mongolia’s growth should reach 5.8% this year, but flagged a worsening fiscal path—moving from a 2025 surplus to a 2026 deficit and rising debt and financing needs through 2031. EAEU Trade Boost: The EAEU–Mongolia interim trade agreement took effect July 22, cutting or removing customs duties on 367 product categories, with agriculture and livestock making up 97.5% of covered exports. Housing Fraud Crackdown: Mongolia set up a working group to investigate housing reservation scams after police recorded 39,665 fraud cases (1,167 housing-related), with damages to citizens totaling MNT 204.9 billion. Mining Updates: Erdene reported improved Q2 2026 performance at the Bayan Khundii gold mine, with 11,709 ounces produced (+37% quarter-on-quarter) and higher processed ore grade and recoveries. Bilateral Business Push: Mongolia and Tajikistan held official talks and a business forum, signing 11 cooperation documents spanning trade, transport, logistics, agriculture, light industry, and geology. Education Win: Mongolia’s team won medals at the 9th International Economics Olympiad in Shenzhen, taking one silver and two bronzes.

EAEU Trade Boost: Mongolia’s interim trade deal with the Eurasian Economic Union takes effect July 22, cutting or removing tariffs on 367 product categories; the pact covers about 90% of bilateral trade, with Mongolia expecting tariff relief on meat, cashmere and other goods and a potential export jump and extra $150m in revenue over three years. Bilateral Deals: Mongolia and Tajikistan sealed 11 cooperation agreements during President Emomali Rahmon’s visit, including visa-free travel for holders of diplomatic and official passports (up to 30 days) and new plans across transport, agriculture, mining, education, geology, and investment. Housing Fraud Crackdown: A new working group has been set up to investigate and resolve “housing reservation” fraud cases, after police recorded 39,665 fraud offenses nationwide over 2024–2026, with housing scams causing MNT 204.9bn in damages to 3,613 citizens. Fuel Price Pressure: Mongolia’s AI-92 gasoline pump prices rose by MNT 250–300 per liter after renegotiated Russian import rates lifted the border price to USD 800/ton. Mining Update: Mongolian Mining Corporation published its operational update for the quarter ended June 30, 2026, covering performance across its Mongolian coal and metals portfolio. Business & Talent: Mongolia won medals at the 9th International Economics Olympiad in Shenzhen (one silver, two bronze), while an American university expanded partnerships with Mongolian institutions and Ömnögovi Province.

EAEU Trade Boost: The Eurasian Economic Union’s interim trade deal with Mongolia kicks in July 22, cutting or removing tariffs on 367 product categories (about 90% of bilateral trade) for three years, with preferential access for EAEU exporters (dairy, vehicles, cosmetics) and Mongolian goods (meat, cashmere, agriculture and industrial items). Bilateral Deals with Tajikistan: Mongolia and Tajikistan signed 11 cooperation documents during President Emomali Rahmon’s visit, including visa-free travel for holders of diplomatic/official passports (up to 30 days) and agreements on transport, agriculture, trade, education, mining, environment, youth and investment. Fuel Prices: Mongolia’s AI-92 gasoline pump prices rose by MNT 250–300 per liter after renegotiated Russian import rates increased the border price to USD 800 per ton. Winter Readiness: Prime Minister Uchral Nyam-Osor ordered aimag and capital governors to accelerate 2026–2027 winter and spring preparations, including hay/fodder and meat reserves and preventive veterinary measures. Aviation Link: COMAC’s C919 is set to start its first scheduled international commercial service next month, with Air China launching daily Beijing–Ulaanbaatar flights from Aug 12.

Mongolia–Tajikistan Diplomacy for Trade: Presidents Khurelsukh and Rahmon met in Ulaanbaatar and oversaw 11 signed cooperation documents, including visa-free travel for diplomatic/official passport holders for up to 30 days and a new international road transport agreement to boost trade and transit links. Winter Readiness: PM Uchral Nyam-Osor told aimag and capital governors to accelerate 2026-2027 winter and spring preparations, including hay/fodder and meat reserves, preventive veterinary measures, and readiness of medicines and specialized equipment. Fuel Costs Hit Households: Mongolia’s AI-92 gasoline pump prices rose by MNT 250–300 per liter after renegotiated Russian import rates lifted the border price to about USD 800 per ton. Trade Momentum via EAEU: The EAEU–Mongolia interim trade deal takes effect July 22, cutting tariffs on key Mongolian exports. Mining Exports Drive Growth: Mongolia’s foreign trade turnover jumped 36.3% y/y to $16.5bn in H1 2026, with mining exports nearly 90% of total exports and China taking 94.1% of exports. Energy Investment Push: Jade Gas signed a non-binding funding collaboration for Phase 1 of the Red Lake coal bed methane project, targeting 175 wells and up to A$1.1bn in estimated funding.

Aviation & Trade Links: Air China will start the first routine international service for the COMAC C919 on the Beijing–Ulaanbaatar route from Aug 12, daily with up to 158 seats, signaling stronger China–Mongolia connectivity for passengers and cargo. Mongolia Economy: Mongolia’s foreign trade turnover rose 36.3% y/y to $16.5bn in H1 2026, with a $4.3bn surplus, driven by mining exports (about 90% of exports) and China dominating trade (94.1% of exports). Energy & Investment: Jade Gas signed a non-binding deal for about A$1.1bn to fund Phase 1 of the Red Lake coal bed methane project in Mongolia, including 175 wells and infrastructure, with drilling mobilization targeted for Feb–Mar 2027. Policy & Business Climate: Prime Minister Uchral’s first 100 days highlight faster business registration and tax relief, but the key test remains whether Oyu Tolgoi can deliver a 53% economic return. Tourism Access: Mongolia’s “Gurvansaikhan” Airport in Umnugobi received its first international flight, bringing 80+ Japanese tourists via Matsumoto–Dalanzadgad. Security Incident: Israeli tourists were reportedly attacked in northern Mongolia; authorities condemned the assault.

Mongolia-China Aviation & Trade: Air China will start routine international C919 service on the Beijing–Ulaanbaatar route from Aug 12, a milestone for COMAC’s push beyond domestic flying and a new direct link for Mongolia’s travel market. Energy & Gas Investment: ASX-listed Jade Gas says a consortium led by PT Beijing Energy Linking will fund 100% of Phase 1 drilling for Mongolia’s Red Lake coal bed methane, with 175 wells planned and initial rig mobilisation targeted for Feb–Mar next year. Geopolitics & Critical Minerals: A report highlights rare-earth smuggling risks tied to Inner Mongolia’s Bayan Obo and Japan’s “Southern Mongolia” political framing—an issue with direct implications for supply security. Digital Development & Policy: At the World AI Conference in Shanghai, Mongolian digital minister Nomin Chinbat pointed to China’s “west compute and east data” approach and broader AI capacity-building efforts, while South Korea’s science minister warned frontier AI could become a strategic asset like nuclear weapons. Tourism Connectivity: Umnugobi’s Gurvansaikhan Airport received its first international flight, bringing 80+ Japanese tourists to Dalanzadgad and supporting plans for more regular routes. Security Incident: Israeli tourists were reportedly assaulted in Mongolia by an alleged attacker who shouted “Heil Hitler,” prompting renewed attention on safety and hate-related risks.

Mongolia–Tajikistan State Visit: President Emomali Rahmon will visit Mongolia July 20–22, the first in 17 years, with talks spanning trade, economy, agriculture, energy, transport and culture, plus a Mongolia–Tajikistan business roundtable. AI & Digital Governance: At the World AI Conference in Shanghai, Mongolia’s digital minister Nomin Chinbat highlighted China’s “west compute and east data” approach, while global officials pushed for inclusive AI rules that don’t freeze early-stage growth in developing economies. Mongolia in the AI Weather Mix: China’s MAZU AI early-warning system is being deployed in climate-vulnerable countries including Mongolia, aiming to cut the economic and livelihood hit from extreme weather. Data Centers & Power Demand: Coverage at WAIC stressed that AI competitiveness now hinges on electricity reliability and sustainability, as global data center power use is projected to nearly double by 2030. Climate Education in Ulaanbaatar: UNDP and Mongolia’s culture ministry are running a Model COP for high schoolers on Aug 14, with registration open July 17–24.

Mongolia–Tajikistan Diplomacy: President Emomali Rahmon will visit Mongolia July 20–22, the first Tajik leader trip in 17 years, with talks covering politics, trade, the economy, agriculture, energy, transport and culture, plus a Mongolia–Tajikistan business roundtable. AI Governance & Digital Policy: At the 2026 World AI Conference in Shanghai, Mongolia’s digital minister Nomin Chinbat highlighted China’s “west compute and east data” approach, while speakers stressed Global South access and warned governance shouldn’t freeze early adoption. Energy for Data Centers: A global AI infrastructure report flagged electricity as the key constraint for data centers, with power demand expected to nearly double by 2030—relevant for Mongolia’s own grid and connectivity planning. Fuel Prices in Mongolia: Mongolia’s fuel market shifts from July 15: AI-92 gasoline rises by MNT 250/liter and diesel falls by MNT 150/liter, tied to changes in Russian border prices (Russia supplies 97% of imports). Mining Watch: Azzuro Resources reported high-grade copper-gold results from its Red Hill VMS project in Mongolia, adding momentum to the country’s expanding critical minerals story. Climate Youth Program: UNDP and Mongolia’s culture ministry are running a Model COP in Ulaanbaatar on Aug 14, training 100 high school students on climate change and social entrepreneurship.

AI & Power Infrastructure: A new report at Shanghai’s World AI Conference says global data-center electricity use could nearly double from ~485 TWh (2025) to ~945 TWh by 2030, pushing governments to rethink grid capacity and approvals for new AI facilities. Global AI Governance (Mongolia angle): At WAIC, scholars warned AI rules could widen the digital divide; former Mongolia president Nambaryn Enkhbayar argued governance shouldn’t block early adoption and that Mongolia is ready to develop AI via cooperation. Mongolia–Tajikistan Diplomacy & Trade: Mongolia announced President Emomali Rahmon’s state visit (July 20–22), with talks covering trade, economy, agriculture, energy, transport, and a business roundtable on the sidelines. Mongolia–China Connectivity: China’s Inner Mongolia push for faster port growth and cross-border e-commerce also highlights the China–Mongolia–Russia corridor and “computing power + electricity” coordination. Fuel Prices in Mongolia: Mongolia’s fuel retail prices shift from July 15: AI-92 gasoline up by MNT 250/liter and diesel down by MNT 150/liter, tied to changes in Russian border prices. Mining Watch (Mongolia): Azzuro Resources reported a high-grade copper-gold intercept at its Red Hill VMS project in Mongolia (11.94% Cu over 1.6m), adding momentum to the 2026 copper supply race. Youth Climate Event in Ulaanbaatar: UNDP and Mongolia’s culture ministry are running a Model COP for 100 high school students on Aug 14, focused on climate change, desertification, and sustainable development.

Mongolia–Tajikistan Diplomacy: President Khurelsukh will host Tajik President Emomali Rahmon for a July 20–22 state visit, with talks spanning trade, the economy, agriculture, energy, transport and culture, plus a Mongolia–Tajikistan Business Roundtable. Energy Modernization: Mongolia’s Council of Ministers approved a 2026–2035 strategic plan for smart energy grids and digital tech to boost efficiency, reliability and transparency, with cybersecurity and energy-market digitalization in focus. Fuel Prices: From July 15, Mongolia raised AI-92 gasoline by MNT 250/liter and cut diesel by MNT 150/liter, tracking changes in Russian border prices (Russia supplies 97% of petroleum imports). Mining & Investment Signals: Azzuro Resources reported a high-grade Red Hill VMS drill intercept (11.94% Cu, 1.63 g/t Au over 1.6m), underscoring Mongolia’s expanding copper potential beyond porphyries. Exploration Funding: Tartana Minerals secured an A$5.18m cornerstone investment from Xingye Gold for a 19.99% stake, aimed at accelerating exploration across silver, tin and base metals. Climate & Youth Entrepreneurship: UNDP/UNCCD’s co-funded “Youth Co:Lab Mongolia” will run a Model COP in Ulaanbaatar on Aug 14, selecting 100 high school students for training in climate policy and social entrepreneurship. Health Research: A Mongolia-involved international study found fractional COVID-19 booster doses can deliver strong, long-lasting immunity—useful for future vaccine access and cost planning.

Mongolia–China Trade & Logistics: Chinese Vice Premier He Lifeng urged faster development of Inner Mongolia as a “gateway” for opening up to the north, pushing the China–Mongolia–Russia Economic Corridor, cross-border e-commerce, and upgrades to port and land-port logistics. Mongolia Energy Costs: Mongolia’s Ministry of Industry and Mineral Resources raised AI-92 gasoline by MNT 250 per liter and cut diesel by MNT 150 per liter from July 15, linking the move to changes in Russian border prices (Russia supplies 97% of Mongolia’s petroleum imports). Mining & Markets: Rio Tinto’s Q2 update flagged a Mongolia-linked tax outflow and mixed iron ore performance, while brokers noted cost pressure from higher diesel. Naadam Sports: B.Orkhonbayar won the National Wrestling Tournament to become “Dayan Avarga,” defeating ten straight opponents. Cashmere Sustainability: Textile Exchange released a study comparing nomadic grazing vs farmed cashmere in China and Mongolia, finding no significant climate-change difference per kilogram of clean dehaired cashmere. Culture & Heritage: A new exhibition in the UK highlights Genghis Khan’s global impact with 248 artifacts, many previously unseen outside Mongolia.

Fuel Prices: Mongolia’s Ministry of Industry and Mineral Resources raised AI-92 gasoline by MNT 250 per liter and cut diesel by MNT 150 per liter from July 15, citing changes in July border prices from Russia’s Rosneft and other suppliers; with Russia providing 97% of petroleum imports, the government says it’s monitoring developments to keep supply stable. Critical Minerals & Mining Finance: Tartana Minerals agreed a A$5.18m cornerstone investment with Xingye Gold (Hong Kong), where Xingye will buy shares at a 165% premium to accelerate exploration across Queensland silver, tin and base metals; the two-tranche deal targets a 19.99% stake, pending due diligence and regulatory approvals. Energy Infrastructure: The Council of Ministers of Energy approved a 2026–2035 strategic plan for smart energy grids and digital tech, aiming to boost efficiency, reliability, transparency, and cybersecurity for electricity and heat supply. Mongolia in the Spotlight: The HU’s new “Echoes Of My Father” video drops ahead of its July 24 album “Hun,” while B.Orkhonbayar won Naadam’s National Wrestling Tournament to become “Dayan Avarga.” Sports & Business Pulse: Mongolia-linked market coverage also notes small-cap momentum on the ASX, alongside broader global commodity and policy signals.

Mining & Markets: Berenberg cut its Rio Tinto target to 8,100p after Q2, pointing to higher Pilbara diesel costs and iron-ore downside risk; Rio also flagged a $1.2bn working-capital cash outflow tied to rising iron-ore inventories and a $443m tax outflow in Mongolia. Copper Exploration (Mongolia): Azzuro extended its Red Hill copper-gold system to nearly 550m, with standout assays including MU2605 hitting 1.6m at 11.94% Cu plus gold, silver and zinc, while mineralisation remains open west, east and at depth. Energy Tech: Huawei pushed a grid-forming strategy for future power systems, arguing PV and battery storage must evolve into “primary power” as Europe’s wind and solar penetration rises. Tourism & Culture (Mongolia): Explorer.Company launched self-drive itineraries timed to Mongolia’s eagle-hunting and horse festivals this autumn. Business & Trade (Mongolia-linked): A Korea-Mongolia retail and food wave is reshaping Ulaanbaatar’s consumer scene, with Korean convenience chains and K-food exports growing fast. Policy/Geopolitics: South Korea’s NSC met to coordinate U.S. trade-and-security responses amid Washington complaints over a major Coupang data leak.

Mongolia Mining Watch: Azzuro extended its Red Hill copper-gold VMS strike to nearly 550m, with standout hole MU2605 returning 1.6m grading 11.94% copper plus gold, silver and zinc; the system remains open west, east and at depth, adding momentum for Mongolia’s critical-minerals pipeline. Energy & Geopolitics: China’s pricing pressure is said to have effectively priced Russia’s Power of Siberia-2 out of the deal, underlining how gas export projects face tougher economics than oil. Grid Tech: Huawei is pushing a grid-forming, integrated approach for renewables, aiming to stabilize power systems as Europe’s wind and solar penetration rises. Trade & Security Diplomacy: South Korea’s NSC reviewed U.S. trade-and-security issues amid Washington complaints over a Coupang data leak, signaling continued friction that can spill into business risk. Retail & Food Links: Ulaanbaatar’s “Mongtan” boom highlights how Korean convenience and K-food are expanding, with Mongolia seen as a growth market for exports. Aviation Tech for Mongolia: Thales is set to upgrade Mongolia’s air traffic management infrastructure, a direct enabler for smoother regional connectivity.

Mongolia–South Korea business push: Visa has appointed Arturo Planella as group country manager for Japan, Korea and Mongolia, signaling continued focus on payments and cross-border commerce. Mining & investment signals: Rio Tinto reaffirmed 2026 production targets, with Oyu Tolgoi ramp-up in Mongolia “on track,” while ASX trading leaned on mining strength as iron ore topped US$100/t and copper prices rose. Air traffic modernization: Thales won a contract to modernise Mongolia’s air traffic management infrastructure, a direct upgrade for aviation capacity and reliability. Trade & logistics momentum: Chapman Freeborn completed a 121-horse charter from Mongolia to Vietnam via three Boeing 757 freighter flights in 38 hours, highlighting Mongolia’s growing role in specialized animal logistics. Tourism & culture: A new exhibition in the UK is bringing 248 Mongolian artefacts on the Mongol Empire to Leeds, boosting international visibility for Mongolian heritage. Regional context: China’s economy grew 4.3% in Q2, the slowest in three years, with property weakness weighing on consumption—an important backdrop for Mongolia’s trade outlook with its biggest neighbor.