Mongolia’s 2026 Budget Rests on a Record 90 Million Tonnes of Coal Exports at $70 a Tonne

Mongolia's public finances for 2026 are built on an assumption about a commodity whose price collapsed last year.

The Ministry of Economy and Development projects 90 million tonnes of coal exports in 2026 at an average price of around $70 a tonne, implying export proceeds of roughly $6.3 billion. That volume would be an all-time high, exceeding the 89.7 million tonnes shipped in 2025.

The 2026 consolidated budget is planned with revenues of about MNT 31.6 trillion against expenditures of roughly MNT 33.0 trillion, implying a deficit near 1.4% of GDP.

The difficulty is that volume and value have been moving in opposite directions.

What happened to the price

Coal export volumes rose 7% year on year in 2025, from 83.8 million tonnes to 89.7 million, surpassing the government's annual target of 85 million. Export value fell to $5.8 billion — down 34%.

For context, 2024 volumes of 83.7 million tonnes generated $8.6 billion. Mongolia is now shipping more coal for substantially less money.

The draft 2026 budget law attributes the pricing weakness to conditions across the border. Weaker activity in China's steel and industrial sectors during the first half of 2025 contributed to higher stockpiles and depressed prices at the frontier.

Mongolia sends roughly 90% of its exports to China, and coal is the largest single component. There is no alternative market at that scale — the rail and road infrastructure runs south.

The assumptions to watch

Two variables sit underneath the budget, and neither is within Mongolian control.

The first is price. The $70 assumption is conservative against 2024's realised average of around $103 a tonne, but it is well above nothing, and a further deterioration in Chinese steel demand would flow directly into the fiscal position.

The second is border execution. Mongolia's coal moves through a small number of crossings, principally Gashuunsukhait, and throughput constraints have repeatedly limited shipments regardless of demand. Capacity expansion at the Gashuunsukhait-Gantsmod connection has been a policy priority for several years.

One factor may work in Mongolia's favour. The partial implementation of China's "276 working days" policy, effective from August 2025, restricts domestic Chinese coal production — which tends to support import demand.

Why it matters beyond the budget

For foreign investors the read is straightforward: coal prices and border execution remain the primary determinants of fiscal performance, liquidity conditions and currency dynamics.

That dependence is the context for much else the government is attempting. The push to attract data centre investment, the clean energy target of 53.4% by 2050, the bill limiting state participation in the economy and the Bogd Bank listing in New York are all, in different ways, attempts to build revenue that does not arrive by truck through a border crossing in the Gobi.

Copper has taken some of the strain. Copper ore exports surged 76% in 2025 as production expanded at Oyu Tolgoi, and gold rose 38%.

What to watch

Monthly export data is the running indicator, and the National Statistics Office publishes it.

The second is the Chinese steel sector. Mongolian coking coal prices are set by demand from mills it does not control.

The third is whether the 90 million tonne target holds. Missing it by even 5% would take roughly $315 million out of projected proceeds at the assumed price — against a planned deficit of 1.4% of GDP.