Rio Tinto and the Mongolian government are locked in a game of brinkmanship ahead of a major mining decision in May, with the company seeking resolution of a number of geological, financial, engineering and power supply issues before it considers a request to change the agreements governing the $US6.75 billion Oyu Tolgoi project.

Mongolia escalated the stoush over the troubled copper project on Monday, when it told Rio and other foreign investors that it would use its powers to terminate the 2015 agreement that governs the fiscal terms for the underground expansion of Oyu Tolgoi unless it became more economically attractive to the host nation.