Can Redirecting Mongolia’s Mining Billions to Local Hands Avoid the Resource Curse—or Ignite It?
- Mongolia Weekly
- Jan 30
- 3 min read
Royalty Overhaul Forces Choice: Immediate Cash for Mining Towns vs. a Sovereign Wealth Safety Net
Mineral royalties, the fees levied on extracted resources, are a cornerstone of Mongolia’s economy. As these revenues grow, so does the debate: Should Mongolia spend these funds immediately to boost local development, especially in mining towns, or save them for future generations through a sovereign wealth fund? The central question remains: Who should benefit more—the entire nation or the communities directly impacted by mining activities?
As demands grow for greater local control over mining revenues, the parliament plans to deliberate a transformative proposal. Set for its 2025 spring session, the plan mandates that at least 30% of the Mineral Resource Extraction Tax (MRET or royalties) collected from a given province or sub-province be directly funnelled into that locality’s development fund. This is on top of other taxes in the mineral sector.
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