Mongolia urges Rio Tinto to rewrite copper mine terms

Mongolia is seeking to renegotiate the "unfair" commercial terms of mining giant Rio Tinto's $US18 billion ($A25 billion) Oyu Tolgoi copper mine, the Financial Times reports.

Mongolian Prime Minister Gombojavyn Zandanshatar warned the British-Australian multinational in a meeting on Monday that the current deal was unfair, adding that "this whole situation feels like the Mongolian people and the parliament are being deceived", the newspaper said on Monday, citing video it had seen.

A Rio Tinto spokesperson told Reuters the company was engaged in active negotiations with the Mongolian government, adding that the discussions reflected their continued commitment to working together to achieve Oyu Tolgoi's full potential for the benefit of all partners.

Zandanshatar and other government officials would meet Rio executives, including head of copper Katie Jackson, this week to discuss the terms of the deal, the report said.

Mongolia owns 34 per cent of Oyu Tolgoi, one of the world's largest-known copper and gold deposits, while Rio holds a 66 per cent stake.

The facility is Rio's biggest copper growth project and began open-pit mining in 2011.

Mongolia took a multibillion-dollar loan from Rio Tinto at a floating interest rate that was more than 11 per cent to fund its share of the capital expenditure needed to develop the mine, the FT said.

The government is proposing Rio reduce the interest rate on the loan to less than six per cent and cut the annual management fee it charges for the project, the report said, adding that Rio risked an increased rate of export tax if negotiations between the parties went poorly.

Reuters could not immediately verify the report.

Rio Tinto did not immediately respond to a request for comment.

At peak production Oyu Tolgoi is expected to produce 500,000 tonnes of copper annually, according to its website.

In 2022, Rio agreed to waive $US2.4 billion in debt owed to it by the government related to Oyu Tolgoi with both sides agreeing to "reset" their relationship.