Prime Minister Chimed Saikhanbileg said that the tax dispute with Rio Tinto has been resolved and an agreement has been signed over the phase two expansion of Oyu Tolgoi copper and gold mine.
Bloomberg quoted Saikhanbileg as saying: "The two sides have reached agreement, in principle, on the main points of dispute.
"Soon we will officially announce these results to the international community, after bureaucratic levels finalize relevant steps."
Rio Tinto and Mongolia have been in a dispute over taxes and cost overruns associated with the first phase of the project.
Oyu Tolgoi proposed expansion, which includes construction of an underground mining complex, has been under discussion over last two years.
The government is also moving ahead to finalize talks with a foreign consortium for $4bn expansion at Tavan Tolgoi deposit.
Energy Resources, China Shenhua Energy and Sumitomo are among those interested to develop Tavan Tolgoi project.
