South Korea, Mongolia expand cooperation in AI, critical minerals

South Korea and Mongolia have agreed to expand economic cooperation, focusing on future strategic sectors including AI technology, data center development, critical mineral supply chains, renewable energy and healthcare.

The agreement aims to give concrete shape to the "golden era of Korea-Mongolia relations" that the two leaders agreed upon during President Lee Jae Myung's state visit to Mongolia — the first by a South Korean president in 15 years. To deliver tangible results, the two sides agreed to establish a direct hotline between their deputy prime ministers and maintain close communication.

The Ministry of Finance and Economy said Friday that Deputy Prime Minister Koo Yun-cheol held separate meetings Thursday with Mongolian First Deputy Prime Minister and Minister of Economic Development Jadamba Enkhbayar and Finance Minister Zagdjavyn Mendsaikhan on the sidelines of President Lee's state visit, discussing ways to expand strategic economic cooperation between the two countries.

"If Mongolia's abundant mineral and climate resources are combined with Korea's advanced technological capabilities, we can open a new golden era of Korea-Mongolia economic cooperation," Koo said. "Let us push forward a range of mutually beneficial cooperative projects — including critical mineral supply chain cooperation in rare earths and other materials, renewable energy development and AI collaboration."

Mongolia signaled an equally strong desire to deepen ties. First Deputy Prime Minister Enkhbayar described South Korea as "an important third-neighbor country and partner in economic development," and proposed strengthening the strategic partnership on the basis of cultural similarities and active people-to-people exchanges. Both sides welcomed the agreement in principle on a Korea-Mongolia Comprehensive Economic Partnership Agreement reached during the visit, and agreed to build on it by expanding cooperation beyond trade and investment into strategic areas such as critical mineral development and AI and digital infrastructure.

Finance Minister Mendsaikhan said Mongolia has "great interest in Korea's economic development experience and technological capabilities," adding that he hopes more Korean companies will enter the Mongolian market, particularly in areas where the two sides can generate synergies such as AI and renewable energy. "To that end, we will do our utmost to improve the investment environment in Mongolia," he said.

Alongside economic cooperation, the two countries will also strengthen collaboration in healthcare. The Ministry of Finance and Economy signed an MOU with Mongolia's Finance Ministry on cooperation for the construction of Mongolia's second national cancer center. The agreement is intended to expedite a feasibility study for the cancer center project, for which Mongolia has requested support from Korea's Economic Development Cooperation Fund. Plans to introduce an AI-based next-generation medical system will be developed in detail during the feasibility study. The government also plans to support Mongolia's capacity to combat cancer through the Knowledge Sharing Program, in addition to the fund.

The feasibility study will be the first project launched since the Ministry of Finance and Economy unveiled a new vision for the Economic Development Cooperation Fund in April. The government's policy is to expand development cooperation by leveraging Korea's strengths in areas such as AI, while broadening overseas business opportunities for Korean companies at the same time.

Export financing support will also be expanded. The ministry facilitated the signing of an MOU between the Export-Import Bank of Korea and Mongolia's Trade and Development Bank to provide $30 million in on-lending financing. Under the arrangement, the Export-Import Bank of Korea supplies funds to the local Mongolian bank, which then lends them to importers of Korean products.

The mechanism will channel policy funds indirectly to Mongolian companies importing Korean goods, and is expected to help Korean firms expand exports to Mongolia across categories including food and beverages and cosmetics.

The government said it will support the smooth implementation of economic deliverables from the summit while actively identifying new cooperative projects with the Mongolian government that can contribute to the shared prosperity of both countries.