In this paper, we studied one of the largest coal mines in Mongolia, the Baganuur Coal Mine, in terms of environmental sustainability related to mining practices, with a focus on discharged water and waste sediments. The present quality and potential for future pollution were assessed. Based on World Health Organization and Mongolian guidelines, groundwater pumped from the mining operations could be used for drinking and domestic purposes. In addition, based on the Na absorption ratio, groundwater samples from GW-2 and GW-3 could be used as agriculture water supplies with salinity reduction, or used to grow halophytes as a measure for desertification control and pasture production. All waste soil samples appeared to have a desertification potential. Dust particles smaller than 150 μm comprised more than 80% of soil samples, which had arsenic levels higher than the Mongolian soil pollution standards. In addition, soil collected between coal seams (S-5) showed high sulphur content based on X-ray fluorescence (XRF) and scanning electron microscopy–energy dispersive X-ray (SEM-EDX) spectroscopy analyses, strong potential for producing acid mine drainage in the analysis of pH of net acid generation and net acid production potential, and potential for leaching of metals, such as Co. Therefore, the Baganuur Coal Mine requires soil pollution control measures to mitigate the risks of dust and desertification. In this perspective, mine groundwater could be used to reduce environmental stresses by supporting pasture crops such as halophytes on waste disposal sites, thereby preventing dust issues and desertification. Continuous efforts, including monitoring and enacting environmental management measures, are needed from both the mining company and the government to ensure sustainable mine development.