Rio Tinto has resolved a long-running dispute with Mongolia in a much needed boost for the mining firm.

Rio began work underground at one of the world’s largest copper deposits after agreeing to waive £1.8billion of debt and interest owed by the government to fund its share of the development.

The £5.1billion project has been beset by delays and cost overruns. 

Setbacks have dogged several Rio projects, complicating plans to focus on green metals ahead of the renewables revolution.

The progress in Mongolia comes days after Rio was blindsided by Serbia, which pulled the plug on a £1.8billion mine it was planning to build there.

Rio is also struggling to get a huge copper project in Arizona off the ground, and is battling to rehabilitate its reputation after blowing up two Aboriginal caves in 2020. 

Shares rose 0.9 per cent, or 49p, to 5311p.