The more closely one looks at Mongolia, the clearer it becomes that Australia is not just a close partner; it may well be the model Mongolia has been circling all along. In terms of economic structure, geopolitical positioning and political values, the two countries are more alike than one may think.
That is why both countries should pursue a deeper partnership. More than half a century after establishing diplomatic ties, they are well placed to take the next step, building on their identities as resource-rich democracies and coordinating more deliberately on trade, diplomacy and regional strategy.
Both governments should focus on shifting from ad hoc cooperation to a structured strategic partnership that links resources, defence, climate and education. They should institutionalise regular senior-level dialogue, set shared goals and turn existing people-to-people ties into concrete capability.
Mongolian Prime Minister Gombojav Zandanshatar once said the country should develop like Japan. The sentiment was well received but structurally misplaced. Japan rose through mass industrialisation, high-end manufacturing and a tightly coordinated public and private system that Mongolia does not share. The two may both sit in Northeast Asia, but economically they inhabit different realities.
Australia, by contrast, rests on a foundation Mongolia knows well. Both are democracies with large land masses, small populations, and economies powered by natural resources. More than 90 percent of Mongolia’s exports go to China, led by coal, copper and gold. China also takes more than a third of Australia’s total exports. In Mongolia, mining accounts for roughly 30 percent of GDP; in Australia, it contributes around 14 percent yet generates more than 70 percent of total exports and underpins sectors such as finance and infrastructure.
This is not just about digging and selling rocks. Australia has been effective at turning mining revenue into national wealth. Companies such as BHP began in the outback and now operate globally, investing in renewables, research and technology. Rio Tinto, the largest foreign investor in Mongolia, is co-headquartered in Melbourne. From superannuation funds to public broadcasting and research institutions, Australia’s mining success has funded a wider economic and civic landscape.
Mongolia has yet to make that leap. Booms have produced windfalls, but too often they have been used for short-term stimulus rather than long-term investment. Corruption, price volatility and a lack of institutional consensus have hampered efforts to turn resource wealth into durable growth. The difference is not only fiscal tools but strategic intent.
Australia offers a simple lesson: the purpose of mining is not to mine forever, but to use the revenue to build a downstream economy so mining becomes less essential over time. Successful resource exporters treat minerals as the starting point, not the objective. Mongolia has the geology and the demand; it needs a sharper vision for turning extraction into lasting strength.
The similarities extend beyond economics. Both countries navigate a balance between liberal democratic values and deep trade dependence on China. Australia has learned to assert sovereignty while managing economic coercion. Mongolia lives with that tension every day, exercising agency between two assertive neighbours and preserving space for independent decision-making.
Despite strategic ambiguity, both lean politically and culturally towards the West. Mongolia contributed troops to missions in Afghanistan and Iraq, trains peacekeepers with Australia and aligns with global rules and norms. Australia has supported Mongolia’s entry into Indo-Pacific dialogues and increasingly sees it as an indispensable regional player. The countries are often on the same wavelength on issues such as critical minerals, climate resilience and security discussions.
A closer partnership would also serve Australia’s long-term interests. Having a like-minded democracy next to China with a similar export structure creates scope for strategic coordination, especially on resource policy. Over time, the two could align negotiating positions, smooth price volatility and avoid head-to-head competition in key markets. Coordinated action would give greater leverage against China and contribute to a more stable minerals trade architecture in the region.
People-to-people ties are deepening. According to Mongolia’s Ministry of Foreign Affairs, by the end of 2024 Australia hosted the third-largest Mongolian diaspora, after South Korea and the United States. A growing number of Mongolian students, professionals and families are choosing Australia, building affinity and trust between the two societies.
The relationship’s appeal lies in how naturally it has taken shape. Mongolia has not adopted an Australia strategy, nor has Canberra launched a grand Mongolia initiative. The partnership is evolving on its own terms. High-level visits, once rare, are now regular. What began five decades ago as a quiet relationship is gathering traction and purpose.
Sometimes a kindred spirit is not next door but across an ocean. For Mongolia, that counterpart may be Australia, a democracy that shares its values, mirrors its economic structure and increasingly sees its future in the same region.