As the geopolitical paradigm shifts, it is strategically and economically important for Mongolia to constantly expand its partnerships – and it should start by reinvigorating partnerships within the region. From Ulaanbaatar’s point of view, beyond its immediate neighbors, Russia and China, the closest and strongest strategic partners are Japan and South Korea. With Mongolia already enjoying strong diplomatic ties with Tokyo and Seoul, Ulaanbaatar should pursue a trilateral mechanism focused on critical minerals, renewable energy, and food security.
Since 2011, Mongolia has been implementing what is known as the “third neighbor” policy, which includes technologically advanced countries such as Japan and South Korea. Mongolia now enjoys strategic partnerships with both countries and has become one of the region’s trusted partners. Adding substance to their cooperation, all three countries are strong democracies in a region marked by creeping authoritarianism.
Mongolia’s bilateral relations with Japan and South Korea have so far opened tremendous opportunities for economic, investment, and trade relations. In addition, both countries have openly supported Mongolia’s foreign policy engagements and initiatives, such as the Ulaanbaatar Dialogue on Northeast Asian Security, which concerns cooperation mechanisms that impact Seoul and Tokyo directly.
However, given the current state of international affairs, it’s time to move beyond bilateral ties to explore a trilateral partnership between Ulaanbaatar, Tokyo, and Seoul. The competition for reliable partnerships will only sharpen in the next couple years.
South Korea already sees Mongolia as an important source of raw materials that can support South Korea’s advanced manufacturing. South Korean economists and industry specialists alike see the potential for Mongolia to be a reliable supplier of critical minerals. Korean investment can help explore these rare earths, which will being increasingly valuable in the global supply chain. Since becoming strategic partners, Mongolia-South Korea trade has been diversifying, from coal briquettes, gold, and molybdenum ore to consumers goods, foods, cosmetics, and medicine and agriculture.
In 2024, South Korea launched the fourth round of Economic Partnership Agreement (EPA) talks with Mongolia, with a specific focus on “commerce, investment, public procurement and other cooperative initiatives.” The aim is to forge an agreement that will streamline Mongolia-South korea joint projects, especially in the energy and mining sectors as well as “supply chains, logistics, infrastructure and digital sectors.”
Japan, is another strategic partner of Mongolia, with tremendous potential for expanded cooperation. Japan-Mongolia relations have advanced significantly in the last decade. Tokyo has continuously supported Mongolia’s democratization and development in major projects through soft loans and technical assistance from the Japanese International Cooperation Agency (JICA).
In 2022, during Mongolian President Khurelsukh Ukhnaa’s state visit to Japan, the two governments upgraded their 2010 strategic partnership agreement to a “Special Strategic Partnership for Peace and Security,” expanding their cooperation not only in regional affairs but beyond.
Mongolian Foreign Minister Battsetseg Batmunkh is currently on a five-day visit to Japan and where she will hold the Japan-Mongolia foreign minister’s meeting to discuss expanding bilateral relations.
In recent years, the Japanese government has shown more interest in Mongolia’s critical minerals, especially, copper, fluorspar, and rare earths, that can be utilized in Japan’s advanced manufacturing.
Given the similar trajectories of Mongolia’s relationships with both Japan and South Korea, exploring a trilateral partnership that includes both Tokyo and Seoul can have strategic advantages. In separate talks with Japan and South Korea, Mongolia is already expanding economic activities and its role in critical supply chains. A trilateral framework could add impetus to these efforts.
These relationships are especially important to Ulaanbaatar because Mongolia’s transition to renewable energy and economic diversification efforts have become a struggle. The inherent issue for Mongolia has always been financing and infrastructure. For Ulaanbaatar, then, unlocking increased interest and investment from Japan and South Korea would be a major boon.
With the prospect of unlocking Mongolia’s critical minerals sector, Ulaanbaatar has something significant to offer to global partners like Japan and South Korea, which are both advanced technology manufacturers and signatories to the recently established Mineral Security Partnership (MSP). Mongolia’s natural resources will become an important element in how businesses and governments alike seek to mitigate the risk of disruption of critical minerals.