Multinational mining and resources group Rio Tinto will exercise warrants to acquire shares of Ivanhoe Mines, expanding its interest to 30 per cent for about $US393 million.

Rio currently has a 22 per cent stake in the miner of Mongolian copper and gold deposits.

It could blow up its claim to 44 per cent if it applies all its warrants and transforms a $US350m ($412m) load into shares.

The warrants exercised today entitle Rio Tinto to 46 million shares at a subscription price of $US8.54 each.

The two companies teamed up in the Oyu Tolgoi mining project in Mongolia. Today, Rio Tinto said production should start in 2013 with five years following to ramp up to full output.

Earlier this month, Ivanhoe was reported to have been consulting with the Mongolian government in hopes of arriving at an investment deal.

Mongolia in 2006 announced it would seek stakes of up to 50 per cent in strategic mining projects. This is in addition to a windfall tax on company profits from copper and gold production.

Ivanhoe's US-traded shares fell 0.6 per cent at $US13.27 after hours, as Rio Tinto's slid 0.4 per cent at $US45.25. While the former's stock has more than doubled in the last year, Rio's has climbed only modestly, underperforming the market at large.