Mongolia needs to establish a clear coal price index to guide exports and budget planning, a senior lawmaker said, warning that weak pricing and structural problems in the economy are weighing on state revenues.

J. Zoljargal, a member of parliament and former chief executive of the Mongolian Coal Association, said in an interview with News.mn that falling coal prices this year have exposed long-standing flaws in Mongolia's fiscal and industrial model, rather than creating a new problem.

Without a transparent and realistic coal pricing policy or index, budget planning becomes guesswork and the risks are passed directly to public finances, he implied.  "Australia, Indonesia, Russia, Canada, and Mozambique, which earn income by exporting coal, all have an index method for setting prices, but Mongolia does not have a national price policy," he said.

Coal remains Mongolia's largest export and a key source of government income, but budget revenues have been cut after prices and demand came in below expectations. Zoljargal said the government had been relatively cautious in its coal price and volume assumptions this year, helping to avoid a deeper fiscal shock.

He argued that Mongolia's economy has become overly dependent on the state, with the central budget, state-owned enterprises, and local government accounting for roughly 80% of total economic activity. This has crowded out private business and reduced overall income growth, he said.

Zoljargal also cautioned against assumptions that lower prices would allow Mongolia to sell more coal, particularly to China, its dominant export market. Chinese mines are increasingly competitive due to ample domestic supply and inflows of cheaper coal, limiting room for Mongolian exports, he said.

"In a large market, selling coal below a profitable level does not help either side," Zoljargal said, adding that Mongolia must carefully balance export volumes and prices.

He said a coal price index could help anchor negotiations, improve transparency, and reduce volatility for both exporters and the state budget, while broader reforms should focus on shrinking the role of government and easing the tax burden on private businesses to revive growth.

Zoljargal also called on the increase in trades through the Mongolian Stock Exchange to improve coal prices. Currently, about 80% of coal sold by the state-run Erdenes Tavan Tolgoi is directly under large term contracts, with most being high-quality grades, while 20%, largely inferior grades, is sold on the exchange.

"The exchange price is higher (compared to contract prices for the same grade), which is beneficial to Mongolians. Therefore, in the future, we need to change it from 80% v.s. 20% to half-half, and sell only first-class coal on the exchange," he added.