Mongolia is a resource-rich developing country, with over 8,000 known occurrences of more than 80 types of mineral deposits identified across 1,170 registered deposits. The International Monetary Fund, an international financial organization with 189 member countries, identifies Mongolia as one of the 29 resource-rich developing countries due to its richness in natural resources.
Reserves ranking
Source: Ministry of Mining and Heavy Industry, 2022
Production ranking
Source: National Development Agency of Mongolia, 2019
The mining sector CONTRIBUTION TO the economy
The mining sector contribution to the economy
According to the ICMM’s Mining Contribution Index (MCI), mining, and its component copper sectors play an important role in the Mongolian economy. Mongolia ranks third in the world in terms of mining sector contribution to the national economy, with higher contributions than Uzbekistan (ranked 16), Kazakhstan (ranked 17), Georgia (ranked 22), and Russia (ranked 23).
Mongolia’s mining industry value forecast (2018-2023)
Source: Fitch Solutions
MONGOLIA’S MINING INDUSTRY VALUE FORECAST (2024-2029)
Source: Fitch Solutions
MCI rank and scores for the top 23 countries
Source: ICMM
Composition of gross industrial production as a share of total
The mining sector contributes MNT8.1b ($2.8m) to government budget per 24 hours
Source: Mongolian National Mining Association, NSO of Mongolia (2019)
State budget income of Mongolia and mining sector contribution (trillion mnt)
GDP growth and mining sector production
Source: NSO of Mongolia
Mongolia’s return on mineral wealth has increased over recent years, and is now relatively high in comparison to other developing countries.
The World Bank has designated Mongolia as a country with relatively low poverty levels, low-income inequality, and fast economic growth due to rapid mining development.
The poverty level and gap between the rich and poor remain relatively low with high economic growth thanks to the rapid development on the back of the mining sector, however, the inability to properly allocate mining revenues, and over-dependence on mining are the looming risks to the economy, according to the World Bank. On the other hand, there is a risk of becoming overly dependent on the mining industry and risks of increases in inequality cannot be ignored either.
The World Bank estimated that out of every dollar generated from mineral wealth over the last 20 years, Mongolia has consumed 99 cents and saved only 1 cent through its Stabilization and Future Heritage Funds.
The country has only started saving since 2011.
Explained by Political Convenience
Source: The World Bank
How mineral revenues were allocated (as % of GDP)
The use of mineral revenue was mostly determined by political convenience, not economic merit.
Source: The World Bank
Real GDP growth (%)
The macroeconomy is characterised by extreme volatility, affecting households
Even among the commodity exporters, Mongolia’s macro variables exhibit one of the highest volatilities.
Source: The World Bank
Mining labour force
One job created in the mining sector creates between two and four indirect jobs (non-industry related) and between two and seven industry-related jobs.
In the fourth quarter of 2020, Mongolia’s mining sector accounted for 3.9% of total employment. 39.7% of mining workers are young people aged the ages of 25 and 34. In 2018, a total of 10,600 overseas workers received work permits in Mongolia. Of these, 22.8% worked as engineers, mechanics, drilling specialists, electricians, repairmen and welders. According to the International labour organization, Mongolia ranks second in the world in the terms of the percentage of jobs created in the mining sector.
Employment in the mining sector - Mongolia
Production & export
Exports of mineral products (in million tonnes)
Source: The National Statistical Office of Mongolia
MINERAL EXPORT BY CATEGORY, (AS OF 2022)
Mineral exports by year (in billion $)
Source: The National Statistical Office of Mongolia
Mongolia’s export revenue (1995-2019, million $)
