weighted score 3.4 · ten dimensions
Sourcing Attractiveness Index · ten dimensions
Mongolia
Labour cost, supply base depth, logistics infrastructure, trade access, and innovation scores for Mongolia as a sourcing destination.
Labour cost competitiveness
7
Very low labour costs. Minimum wages well below regional manufacturing competitors. Cost advantage strongest in mining, cashmere processing, and basic manufacturing.
Supply base depth
3
Supply base concentrated in mining and cashmere. No significant manufacturing ecosystems beyond primary resource extraction and basic processing. Limited supplier diversification.
Logistics & infrastructure
2
Landlocked between Russia and China. No sea access — all maritime trade transits Chinese or Russian ports. Road and rail infrastructure limited. Extreme distances between population centres.
Workforce skills
4
99% literacy rate. Relatively well-educated workforce for income level. Mining sector has developed technical skills through international partnerships (Oyu Tolgoi). Limited manufacturing skills base.
Scalability
4
Standard GSP access to EU and US markets. No comprehensive FTA with major trade blocs. Landlocked geography and small population constrain scalability for manufactured goods.
Ease of doing business
4
Business environment has improved but resource nationalism creates uncertainty. Contract renegotiation risk for mining investments is documented. Regulatory framework developing but institutional capacity limited.
Trade access & tariffs
2
Standard GSP. No comprehensive FTA with the EU, US, or major Asian economies. Landlocked geography adds transit costs that effectively increase trade barriers.
Sustainability baseline
3
Oyu Tolgoi operates to international ESG standards (IFC Performance Standards). Artisanal mining sector has significant environmental and social concerns. Cashmere overgrazing contributes to desertification.
Innovation & IP
2
R&D investment minimal as a share of GDP. Innovation ecosystem nascent, concentrated in Ulaanbaatar. IP framework exists but enforcement capacity limited.
Quality standards
3
International mining operations (Oyu Tolgoi) meet global quality and safety standards. Cashmere grading systems exist but are inconsistent. Manufacturing quality certification infrastructure underdeveloped.
Mining & Natural Resources
Mining & Natural Resources
- Copper & gold
- Oyu Tolgoi (operated by Rio Tinto) is one of the world's largest copper-gold deposits. The underground expansion is expected to make Mongolia a top-five global copper producer. Gold is also mined at scale, with artisanal gold mining widespread in rural areas.
- Coal exports
- Mongolia is a significant thermal and coking coal exporter, primarily to China. The Tavan Tolgoi deposit is one of the world's largest untapped coking coal reserves. Coal export logistics are constrained by the landlocked geography and limited rail capacity.
- Cashmere
- Mongolia is the world's second-largest cashmere producer after China. Cashmere is a significant non-mining export sector, though value chain development (processing, branding) remains limited compared to Chinese and European competitors.
Infrastructure & Workforce
Infrastructure & Workforce
- Landlocked geography
- Mongolia is landlocked between Russia and China with no direct sea access. All maritime trade must transit through Chinese or Russian ports, creating fundamental logistics constraints. The Scalability score of 4 reflects standard GSP access but severe infrastructure limitations.
- Population & literacy
- Mongolia has a population of approximately 3.4 million spread across 1.6 million km² — one of the lowest population densities globally. Despite the sparse population, literacy is 99% and the workforce is relatively well-educated.
- Climate
- Mongolia has an extreme continental climate with winter temperatures regularly reaching -30°C to -40°C. Dzud (severe winter) events periodically devastate livestock herds and disrupt logistics. The harsh climate constrains year-round operations and adds cost to infrastructure maintenance.