Fitch Ratings has upgraded Mongolian Mining's (HKG:0975) long-term foreign currency issuer default rating to B+ from B, according to a Sunday release.

The rating agency also raised the rating for the company's senior unsecured notes due 2026 to B+ from B.

The action considers Fitch's view of less regulatory constraints for the coal producer's mining operations after Mongolia's sovereign rating upgrade.

Mongolia displays a stronger ability to absorb shocks given larger foreign-exchange reserves, lower debt, and more manageable external debt maturities, Fitch said.

However, Fitch said the country remains susceptible to external risks.

Meanwhile, Mongolian Mining's rating is limited by the concentration of end customers, its small scale, and the high country risk for mining operations.

A sustained EBITDA net leverage above 3x and adverse mining regulatory changes could trigger a negative rating action for the coal producer, Fitch said.

A positive rating action is unlikely given the company's limited scale and diversification.