Mongolia’s rare earth sector sits on a striking gap between potential and proof. The U.S. Geological Survey credits the country with roughly 31 million tonnes of rare earth reserves — about 16.77% of global reserves, second only to China. Mongolia’s own developers report a far smaller currently-defined resource: 3.1 million tonnes of Total Rare Earth Oxides (TREO) across 6 registered deposits, ~80 occurrences, and roughly 300 mineralised points, per the Mongolian National Rare Earth Corp (MNREC). The USGS figure is a reserve-class estimate; the 3.1Mt figure is what exploration has actually delineated to date. The two numbers are not interchangeable, and conflating them overstates how close Mongolia is to becoming a producer.
Outer Mongolia vs Inner Mongolia — The Critical Distinction
Coverage of “Mongolia rare earth” frequently conflates two entirely separate jurisdictions. Inner Mongolia is an autonomous region of China and home to Bayan Obo, the world’s largest rare earth deposit and the anchor of China Northern Rare Earth’s production base. Mongolia — sometimes called Outer Mongolia historically, though the country itself does not use that term — is an independent, landlocked nation bordering both Russia and China, with no rare earth production of its own to date.
This matters commercially as well as geographically: Mongolia’s deposits, ownership structures, and export routes are entirely distinct from China’s, and Mongolia’s own “Third Neighbor” diplomacy (below) is explicitly a strategy for reducing dependence on its two large neighbors — China included.
Mongolia’s Major Rare Earth Deposits
Khalzan Buregtei, in Khovd province in western Mongolia, is the largest of Mongolia’s six registered deposits, accounting for roughly 50% of the country’s total registered REE resource. It is owned by MNREC, itself owned by TDB Capital Singapore Pte Ltd, a Singapore-based investment firm. The deposit is a peralkaline granite system notably rich in dysprosium — among the most valuable rare earth metals — alongside neodymium, praseodymium, and terbium; together these four elements account for around 77% of the ore’s basket value.
Khotgor, in the South Gobi’s Umnugovi province, is Mongolia’s other advanced project and the country’s lighter, NdPr-weighted counterpart to Khalzan Buregtei. Temarise Limited, a UK company, holds 80% of the project after exercising an option from former owner Parabellum Resources (ASX: PBL) in February 2024 for US$15 million. A 2023 JORC-compliant mineral resource estimate put the global resource at 275 million tonnes at 0.91% TREO-Y, including a higher-grade zone of 17 million tonnes at 1.92% and a further 81.6 million tonnes at 1.34% TREO-Y — delivering more than 2.2 million tonnes of contained rare earth oxides at average NdPr grades of around 20% of REO.
Beyond these two, Mushgai Khudag (a South Gobi carbonatite light-REE prospect) and Khukh Del are named in industry coverage but remain at an early, less-advanced stage relative to Khalzan Buregtei and Khotgor.
Mongolia Rare Earth Development Status
Khalzan Buregtei is the more advanced of the two flagship projects. MNREC completed a pre-feasibility study in 2024, and in July 2025 appointed global engineering consultancy Wood plc to lead the Definitive Feasibility Study (DFS), covering concentrator and refinery process plant design. Wood’s brief explicitly positions Khalzan Buregtei as one of the world’s few active sources of heavy rare earths, including dysprosium. Tsolmon Adiya is CEO of MNREC.
Khotgor’s most recent confirmed milestone is the February 2024 Temarise option exercise; no further 2026-dated project-stage update was found in this session. The project should be treated as advancing but with its current development stage unconfirmed beyond 2024 until a fresher status check is run.
On the institutional side, Mongolia’s government renamed the state-owned enterprise Mongolrostsvetmet to Erdenes Critical Minerals in February 2025, explicitly expanding its mandate to cover the “research, exploration, extraction, and utilization of rare earth elements” — formal confirmation that REE development now sits inside Mongolia’s state mining strategy, not just the private sector.
The Third Neighbor Strategy
Mongolia is landlocked between Russia and China, meaning any rare earth concentrate or refined oxide must transit one or the other unless alternative routes are built. “Third Neighbor” diplomacy — Mongolia’s long-running strategy of cultivating partners beyond its two large neighbors — has become the organising frame for its critical minerals outreach to the US, UK, South Korea, Japan, and the EU.
The clearest example: Mongolia and the UK signed a formal strategic roadmap on critical minerals cooperation in June 2025, moving the relationship past evaluation into a signed cooperation framework, with air transport of refined oxides discussed as one proposed element within it. South Korea has established a Korea-Mongolia Rare Metals Cooperation Center in Ulaanbaatar, alongside MoUs between KT Corp, Monnis Group, and Mongolian counterparts on REE supply. Mongolia also attended the 2026 Critical Minerals Ministerial, though no confirmed direct US-Mongolia REE financing deal has been reported to date.
Development Challenges
Processing capacity is the binding constraint at Khalzan Buregtei: estimates put power requirements for full processing at 100-120 MW, more than double current electricity consumption across western Mongolia. Tailings management is the other persistent risk — REE processing generates toxic and sometimes radioactive waste streams, and East Asia Forum analysis (January 2026) specifically flags social-protection gaps for herder communities within the Mongolia-UK cooperation framework as an unresolved ESG issue.
Neither challenge is unique to Mongolia, but the combination — landlocked logistics, a thin power grid, and herder-land sensitivities — sets a longer runway to production than the headline reserve numbers suggest.
Outlook
Mongolia’s rare earth story is currently a story about two projects, not a sector: Khalzan Buregtei’s DFS under Wood plc and Khotgor’s still-unclear 2026 status will determine whether the USGS’s 31-million-tonne reserve estimate ever converts into production, or remains a paper figure relative to the 3.1 million tonnes actually delineated so far. The Third Neighbor diplomatic push — UK, South Korea, and emerging US interest — gives Mongolia routes to capital and offtake that bypass China, but financing and power infrastructure remain the harder problem than diplomacy. For comparison with Mongolia’s fellow landlocked, China-adjacent suppliers, see REM’s coverage of Kazakhstan and Kyrgyzstan rare earth development, both pursuing similar non-China supply chain positioning.
For the broader regional picture, see REM’s Asia rare earth hub guide and China rare earth deposits and policy coverage. Mongolia’s northern neighbor, Russia, faces comparable supply chain risk despite far larger reserves.
This article is for informational purposes only and does not constitute investment advice.
Does Mongolia have large rare earth reserves?
The USGS estimates Mongolia’s rare earth reserves at around 31 million tonnes, the second-largest national reserve estimate after China. However, this is a reserve-class estimate, not a currently-mined or fully-delineated figure. Mongolia’s own developers report a much smaller currently-defined resource across the country’s six registered deposits — see the resource scale section of this page for the distinction.
Why hasn’t Mongolia started rare earth mining yet?
Mongolia’s flagship rare earth projects remain in feasibility and exploration stages rather than production. Constraints include limited processing infrastructure, a power deficit in the regions hosting the largest deposits, and the country’s landlocked position, which complicates export logistics regardless of how advanced a given project becomes.
What are Mongolia’s two main rare earth projects?
Khalzan Buregtei, in western Mongolia, is the country’s largest registered deposit and is notable for its dysprosium content; it is currently in feasibility study. Khotgor, in the South Gobi, holds a large delineated resource weighted toward neodymium and praseodymium and is held by a UK-based developer.
Why is Mongolia’s landlocked position a problem for rare earth exports?
Mongolia borders only Russia and China, so any mineral concentrate or refined product must transit one of the two unless alternative routes are developed. This shapes Mongolia’s entire critical minerals strategy, including its diplomatic outreach to partners further afield.
What is Mongolia’s “Third Neighbor” strategy?
Third Neighbor diplomacy is Mongolia’s long-standing approach to building partnerships beyond Russia and China — with countries including the UK, South Korea, Japan, and the US — to diversify trade, investment, and export routes for its mineral resources, including rare earths.
