Mongolia’s economy has long been disproportionately dependent on its natural resources. Despite the country’s diverse mining products – including copper, iron ore, and coal – uranium and critical minerals have been getting particular attention these days. As global powers compete for uranium, rare earths, and other critical minerals that give them the strategic competitive edge, Mongolia’s mining industry has come to a crossroad. The Mongolian government wants to capitalize on its reserves to diversify not only mining output but also external investors. In seeking to exploit its uranium, in particular, Ulaanbaatar can learn from its global partners like Kazakhstan. The World Nuclear Association projected that global consumption of nuclear energy – with uranium as a key input — will increase around 30 percent by 2030, and potentially double by 2040. This growth is mainly driven by countries that are climate-conscious, and/or investing heavily in artificial intelligence and data centers. The uranium supply, however, has been slower to respond, raising concerns over long-term availability. Australia, Kazakhstan, and Canada dominate global uranium reserves and output, while the United States, Russia, China, and France rank among the largest consumers. In this centralized and increasingly competitive market, new and reliable suppliers are being actively sought, particularly in Central Asia and Europe – and Mongolia is one of the players. According to the Mineral, Resources, and Petroleum Authority of Mongolia, the country possesses an estimated 190,000 tons of identified uranium resources, accounting for approximately 3 percent of global known reserves. These estimates place Mongolia’s reserves on par with those of China and the United States. Mongolia has identified 13 uranium deposits across the country, with several exploration and mining licenses held by foreign-invested companies. Moreover, the Mongolian government has been incentivizing domestic and foreign exploration, and the authorities estimate that the country’s total uranium resources could be as high as 1.5 million tons. While these numbers imply economic benefits to be had, Mongolia has yet to translate its reserves into sustained, large-scale production. There are several reasons why Mongolia’s uranium sector has faced challenges. Mongolia’s current legal foundation for mining uranium dates from 2009, with the adoption of the State Policy on Nuclear Energy and the Nuclear Energy Law. The 2009 law works in tandem with the 2006 Minerals Laws. Under these laws, both domestic and foreign companies face regulatory and licensing challenges. Moreover, between 2006 and 2025, frequent amendments – more than a dozen to the Nuclear Energy Law and several dozen to the Minerals Law – have created perceptions of regulatory instability. Countries like Kazakhstan took a different approach and have been more successful. Mongolia can learn from this example. Kazakhstan’s Successful Uranium Sector In the early 1990s, French state-owned company Orano began operations in both Mongolia and Kazakhstan, yet these trajectories diverged sharply. In Kazakhstan, KATCO, a joint venture between Orano and the national mining company Kazatomprom, moved steadily from exploration to production and began generating output in 2006. Since then, it has produced more than 46,000 tons of uranium, with an annual capacity of approximately 4,000 tons, accounting for around 7 percent of global production. Today, Kazakhstan is the world’s largest uranium producer, responsible for over 40 percent of global output. Although Astana’s production of uranium has slowed down in recent years, the country’s consistent policy, technological leadership – particularly in the widespread use of in-situ leaching (ISL) – and recent legal reforms allowed the state to increase ownership shares up to 90 percent upon contract extensions. These measures have strengthened Kazakhstan’s position as a dominant and reliable global supplier. In Mongolia’s case, its cooperation with Orano has been slow to reap benefits. Exploration, licensing, and feasibility studies took more than two decades. A turning point came after high-level diplomatic exchanges in 2023 and 2024, when Mongolia and Orano signed a major investment agreement, valued at approximately $1.6 billion, to develop the Zuuvch-Ovoo deposit. Production is supposed to commence around 2028. To date, Orano has reportedly invested about $250 million in pilot projects and local development initiatives. Mongolia’s Zuuvch-Ovoo deposit is estimated to contain around 90,000 tons of uranium, making it one of the world’s largest undeveloped deposits. At full capacity, it is expected to produce approximately 2,750 tons annually, or roughly 4 percent of global production. Beyond its economic contribution, the project is widely seen as a test case for restoring foreign investor confidence in Mongolia’s mining sector, particularly in uranium. But Mongolian locals have showed mixed reactions to the development of uranium. Public concern in Mongolia centers on the ecological and health impacts of uranium mining, particularly the risks of radioactive exposure, groundwater contamination, and toxic waste. Reports of livestock mutations and environmental degradation have fueled domestic opposition. However, international experience suggests that radiation exposure from uranium mining is typically lower than many medical radiology procedures when proper safety standards are applied. Mongolia’s geological conditions are well suited to in-situ leaching, with authorities estimating that up to two-thirds of identified resources can be extracted using this method. If implemented effectively, in-situ leaching could address two of the public’s primary concerns: groundwater protection and land use for livestock grazing. Mongolia’s 2024 strategic partnership with Kazakhstan is an opportunity to learn, adopt, and implement. Mongolia’s Mining Sector and Strategic Significance Mongolia’s mining sector, particularly, uranium and critical minerals holds strategic significance for Ulaanbaatar’s global partners, which are looking to secure resource supply chains. Mongolia can start with its two immediate neighbors. China’s uranium demand is projected to account for a substantial share of global consumption by 2030. Mongolia, already a major exporter of coal and copper to China, could integrate uranium into its export portfolio, leveraging geographic proximity and existing trade infrastructure. Russia is also a major player in the global nuclear industry and has expressed interest in deepening cooperation with Mongolia. In 2023, the Russian state corporation Rosatom signed a memorandum in 2023 to explore the feasibility of building a small-capacity nuclear power plant in Mongolia and opened an office in Ulaanbaatar. Mongolia’s New Kharakhorum City may become the first city in the country with a nuclear power plant. Beyond Mongolia’s immediate neighbors, third neighbors such as France, Canada, Japan, South Korea, Czechia, the United Kingdom, and the United States are showing interest in Mongolia’s uranium sector. In January, Mongolia participated in the U.S.-initiated 2026 Critical Minerals Initiative, along with 50 other nations, courting U.S. investment in critical minerals. In 2025, the U.S. Geological Survey included uranium as a critical mineral. A poll of U.S. officials and experts, conducted by the Center for Strategic and International Studies in January 2026, indicated that critical minerals will be the core of China-U.S. economic rivalry, and Mongolia is at the center of it. Mongolia has its own reasons to lean into critical minerals. As the world gradually transitions away from coal, Mongolia faces a strategic imperative to diversify its resource-based economy. The Zandanshatar Gombojav government established a new memorandum of understanding with four privately owned mining conglomerates to pledge 60 percent of strategic mining returns to the public in the form of the new Sovereign Wealth Fund. Such new measures, coupled with good governance and transparency, could lay a strong foundation for the matured mining sector in Mongolia and will help with diversifying investments. A stable uranium supply can also boost Mongolia’s domestic nuclear energy sector. Responsible uranium and critical minerals development offers a viable pathway to sustained growth, strengthen energy diplomacy, and allows Ulaanbaatar to rewire the minerals supply chain, starting with its neighbors in Northeast Asia.

Original source: us