Since transitioning to a market-based economy, Mongolia has experienced a mining boom that turned extractive industries into a key contributor to the country’s national budget. However, benefits from mining activities are allocated unevenly, with increasing rural poverty and degradation of water resources that threaten the livelihood and health of pastoralists, in particular. Regulatory efforts to improve the protection of water resources are confronted with severe implementation challenges as notions of what constitutes appropriate interpretations of the rules and appropriate ways of behaving diverge.Applying Foucault’s concept of governmentality and tying it to the literature on social imaginaries, I show how different rationalities overlap in Mongolian water- and miningscapes. They shape an extractive imaginary perpetuated by technical- managerial truth claims, an increasing monetization of social and social-environmental relationships, an imperative for industrial-economic development, and a state that performs sovereignty by enforcing procedures rather than substantive laws. However, an alternative, cosmo-political imaginary exists that derives its moral imperatives and individual incentive structures from an understanding that human land-use is contingent on the approval of spiritual entities that inhabit nature. As multiple governmentalities exercise power simultaneously, their interaction produces subjectivities that align with various and contradictory positions towards mining and that require negotiation. This challenges simplistic accounts of a homogeneous ‘state’ or ‘community’, as well as a priori assumptions about the interests and rationalities that motivate the behavior of stakeholders. It thus supports a call for environmental governance research and practice to give more attention to the cognitive-symbolic dimension of social-environmental interactions.