In exchange for the cuts, Rio wants several regulatory and budgetary issues resolved and a long-term power agreement for Oyu Tolgoi, the FT reported, citing a letter from Rio Tinto to Mongolia's prime minister last week.

Earlier this month, an independent review of cost overruns at the project had suggested that they were not caused by geology issues, and had raised "certain questions in relation to the project management process".

Rio and Turquoise Hill Resources in April reached an agreement over funding to expand the mine. The mine is 34%-owned by the Mongolian government with the rest held by Turquoise Hill, in which Rio owns a 50.8% stake.