By U.Orgilmaa | Journalist, Op-Ed Contributor

Editor’s note: Translated and edited by Arctus Analytics. The views expressed in this article are those of the author and do not necessarily reflect the editorial position of Arctus Analytics.

If a mining project says it can increase a province’s budget contribution by one-third, bringing it to MNT 110 billion, and presents preliminary feasibility materials indicating potential investment of around USD 4 billion in local development projects, it would normally be expected to receive serious attention.

Yet one such project, despite its potentially high economic value, has faced intense local resistance and repeated disruption. That project is Khalzan Buregtei.

What exactly is there?

The term “critical minerals” in this article refers to minerals of strategic economic importance. Around the world, countries are competing for access to rare earth elements. On April 4, 2025, China imposed strict export controls on dysprosium and several other rare earth elements in response to U.S. tariff measures. Beijing is likely to continue using this policy tool over the next five to ten years.

The results of President Donald Trump’s recent visit to China can hardly be described as historic. There is also little reason to expect that the existing mutual restrictions will be meaningfully softened during President Xi Jinping’s expected visit to the United States this autumn. A deeper discussion of this geopolitical background can be left for another time.

According to project materials, Mongolia has an estimated 3.1 million tonnes of rare earth resources, including both heavy and light rare earth elements, and a significant share of those resources is associated with the Khalzan Buregtei deposit. The theoretical value of the deposit has been presented as reaching around USD 100 billion.

These are small-volume, high-demand raw materials. Demand is expected to grow significantly by 2035, creating space for new exporters to emerge. Mongolia has a real opportunity to become one of the important players in this sector.

Until recently, many of us understood rare earth elements only in general terms. We knew that a wind turbine requires roughly two tonnes of magnets, and that an electric vehicle contains around one to two kilograms of magnets. We also learned that heavy rare earth elements such as dysprosium and terbium are used in advanced military and dual-use applications, including fighter jet engines, radar systems, sensors, guidance systems, vibration control, and night-vision equipment.

In other words, we have come to understand that if wars continue and great-power competition deepens, Mongolia’s rare earth elements will become more valuable. We have also learned that dysprosium, one of the elements used in electric vehicles and now caught up in U.S.-China competition, is present at Khalzan Buregtei.

That is correct. The project is now undergoing its final feasibility study. At present, four economically significant elements have been identified with confidence, one of which is dysprosium. Dysprosium is commonly used in magnets for electric vehicle motors.

Neodymium is a key component of high-strength permanent magnets used in electric motors and wind turbines. Praseodymium is used in rare earth magnets and high-performance metals. Terbium, mentioned above, is used in products such as color displays and energy-efficient fluorescent lighting.

According to project materials, the Khalzan Buregtei deposit contains heavy rare earth elements, including dysprosium and terbium, at a concentration that compares favorably with major rare earth deposits such as Mountain Pass in the United States and Mount Weld in Australia. Its light rare earth content is also described as comparable to those deposits.

The projected economic benefits are substantial. According to figures presented by the project side, annual payments could include MNT 264.6 billion in royalties, MNT 289.7 billion in corporate income tax, more than 600 jobs, MNT 60 billion in salaries, and MNT 20.8 billion in social insurance and other payments and fees. Annual sales have been projected at around MNT 2.6 trillion, with investment estimated at MNT 5.7 trillion.

The project is currently planned for a ten-year period. If additional reserves are confirmed, its operating life could extend to around 25 years. However, exploration work aimed at expanding the resource base has been delayed.

Last week, following a regular Cabinet meeting, the government announced that it would discuss and decide on the completion of geological exploration work at the Khalzan Buregtei deposit and the continuation of the investor’s activities.

Yet in Khovd Province’s Myangad soum, local authorities and residents have strongly opposed the project and have not allowed work to proceed normally. According to official information, there have been three peaceful demonstrations organized with local government approval, two incidents of public disorder, and around 20 unauthorized disruptive actions. Cases involving harm to the health and property of investors and workers have also reportedly been registered.

If the government has truly decided that this project should proceed to completion, then it must first address the disorder surrounding the project through lawful, transparent, and responsible means. Public concerns should be heard. Local residents have the right to information, consultation, and environmental safeguards. But public debate must also be based on facts, science, and the law.

Groundless claims, misinformation, and organized disruption can prevent Mongolia from developing a project of national economic importance. Relevant state institutions and law enforcement bodies should ensure public order, protect lawful protest, prevent violence and intimidation, and create conditions for the completion of exploration and feasibility work.

Local authorities should also work with the project developer to allow the necessary studies to be completed. Opposing a project before the full technical, environmental, and economic assessments are finalized risks undermining not only one investment, but Mongolia’s broader economic security.

To put it plainly: the global economy needs Mongolia’s critical minerals.

If Myangad is an inseparable part of Mongolia, then local concerns should be heard, but the national interest should also be respected. The people of Myangad, the Governor of Khovd Province, and the Governor of Myangad soum have an opportunity to act in line with the government’s direction, contribute to Mongolia’s economic development, and become part of a historically important project.