Steel plant push will invite leading steel-producing countries and major enterprises to participate in a new Mongolian project. Specifically, the government will send bidding documents and organize the selection process by the 27th of next month. The project involves constructing a steel production complex with an annual capacity of at least one million tons. The facility will sit in Orkhon soum of Darkhan-Uul aimag. Developers will build it under an industrial and technology park model. A preliminary feasibility study estimates total investment at USD 806 million.
As of the end of 2025, Mongolia imported one million tons of steel products worth USD 911 million. Demand for steel products is projected to reach USD 1.6 billion by 2030. Once operational, the steel complex will improve the balance of payments by approximately USD 350 to 400 million. Additionally, the plant will also reduce construction costs by around 10 percent.
During the Cabinet session on April 8, 2026, officials noted that Mongolia currently lacks enterprises with experience in building large-scale steel plants. The country has no firms using iron ore-based technology for steel production. The limited availability of specialized engineers and experts poses serious challenges. Therefore, implementing the project domestically without foreign help would increase technological and financial risks. Consequently, the government considers it appropriate to partner with experienced international entities. These partners must possess capital, technology, and market access in the steel industry.
Minister of Industry and Mineral Resources Damdinnyam Gongor outlined the project’s expected benefits. Mongolia will have a steel plant capable of meeting at least 60 to 70 percent of its domestic demand. Once operational, the plant will halve cement costs across the country. It will also reduce prices of key construction materials for builders. Moreover, import dependence will drop significantly as local production ramps up. The facility will create around 1,700 permanent jobs for Mongolian workers.
The bidding process will attract global steel producers and investors. Companies with experience in iron ore-based steelmaking are the primary targets. The government will evaluate proposals based on technology, capital commitment, and market access. Successful bidders will form a partnership with Mongolian authorities. The industrial and technology park model allows for shared infrastructure and services. For instance, construction could begin within 12 to 18 months after selecting a partner. Local manufacturers will benefit from lower input costs. Thus, the project aligns with Mongolia’s broader goal of economic diversification away from mining exports.
