Interest rates may be reduced on loans Rio Tinto makes to the Mongolian company that owns the Oyu Tolgoi copper mine, according to reports from the Asian nation in recent days.

Rio and the Mongolian government have spent most of 2018 negotiating multiple aspects of their pact to jointly develop Oyu Tolgoi, which is currently being expanded into a giant underground mine at at cost of $US5.3 billion.

Mongolia has this year accused Rio subsidiaries of having outstanding tax bills worth $US155 million, forced the mine to source electricity from Mongolia's under-developed energy sector rather than continuing to import power from China, and commenced a corruption investigation into the 2009 agreement that govern's Rio's investment in the project and the division of profits from it.

Mongolian flags fly in Ulaanbaatar. Bloomberg

The two parties agreed to explore "cost reductions" on the giant project earlier this year, and a working party established by the Mongolian government is expected to report its findings before the end of October.

Mongolian press reported in recent days that several of those matters were close to resolution, with reports quoting Mongolian parliamentarian Gombojavyn Zandanshatar as saying that interest rates on shareholder loans would be reduced.