Mongolia has formally launched the international tender for its long-anticipated Steel Production Complex, an $806 million integrated facility in Darkhan-Uul Province. Following the April 8 Cabinet decision, tender documents will be issued to global steelmakers and strategic investors, with the selection process scheduled to conclude by May 27. For investors, this marks the transition of one of Mongolia's flagship "mega projects" from policy aspiration to executable opportunity.

Project Overview

The complex will be built in Orkhon Soum, Darkhan-Uul Province, on a 650-hectare site allocated by the Darkhan-Uul Provincial Citizens' Representative Khural. Designed as an Industrial and Technological Park, the facility will have a minimum annual capacity of one million tons of steel products, with total investment estimated at $806 million based on the preliminary feasibility study.

The project is anchored on the existing Darkhan Metallurgical Plant (DMP), a state-owned enterprise under Erdenes Mongol Group that operates 2 million tons of iron ore concentrate capacity and produces 36,000 tons of steel products annually. 

Strategic Rationale

Mongolia's steel consumption reached 1 million tons by year-end 2025 and is projected to grow to 1.7 million tons by 2030. Today, this demand is met entirely through imports. The new plant is designed to cover at least 60–70% of domestic steel needs.

The economic case rests on three pillars: captive domestic demand, secured feedstock, and rising construction-sector consumption. DMP is advancing the Khust-Uul mine to ensure a sustainable raw material supply for the future complex, positioning the project as a vertically integrated play rather than a standalone greenfield venture.

Macroeconomic & Sectoral Impact

The headline benefit is balance of payments: once operational, the complex would materially narrow Mongolia's persistent trade deficit in manufactured goods. Domestic steel production should also lower input costs across the construction sector. Additionally, integrated steel facilities generate substantial thermal energy as a byproduct. With waste heat recovery systems, this can be captured to produce electricity or provide industrial heating, improving the project's overall efficiency.

The project is expected to generate approximately 1,700 permanent jobs, with broader multiplier effects across logistics, mining services, and downstream fabrication. Preliminary estimates suggest an eight-year payback period.

What This Means for Investors

The steel complex is part of a broader industrialization push. Minister G. Damdinnyam noted that the Ministry of Industry and Mineral Resources will prioritize finalizing major strategic projects during this government's term. A gold refinery international tender is nearing readiness, while the copper smelter selection process is in its final stages.

This sequencing signals sustained policy momentum across Mongolia's value-added minerals agenda as the government seeks to diversify the economy beyond raw commodity exports.