Rio Tinto Group, seeking to develop one of the world's biggest copper mines in Mongolia, said it won't cede control of the $3 billion project to the government.

    Rio Tinto is renegotiating the structure of an investment agreement to allow the Oyu Tolgoi development to proceed, Bret Clayton, chief executive officer of Rio Tinto Copper, said today in an interview. Options include the government gradually increasing its stake in the project, changing the mix of royalties and taxes levied or a production-sharing accord.

    ``We have made very clear that 51 percent ownership by the state is unacceptable and that the sharing of the pie has to be about 50:50,'' Clayton said in London where the company is based. ``We can look at different ways to share it, but we can't go any higher than that or the economics of the project don't stand up.''

    Rio Tinto and partner Ivanhoe Mines Ltd. have been seeking approval for Oyu Tolgoi for five years at a time when emerging- market governments are attempting to boost their share of profits from mining ventures after years of commodity price gains. A redraft of Mongolia's mining laws being considered would allow the government to hold as much as 51 percent of ``strategically important deposits,'' the government said in January.

    Under a draft accord last year, Rio suggested the government have the right to a 34 percent equity stake and related taxes, royalties and dividends that would total about 55 percent of the profits.

    Clayton, who met Prime Minister Sanjaa Bayar in Mongolia last week, said there ``were very encouraging signs that they wanted to proceed quickly.''

    Presidential Vote``Our hope is to get something done by the end of the year to get it through parliament early in the new year before presidential elections due around mid next year,'' he said.

    Rio called Oyu Tolgoi ``the world's largest undeveloped copper-gold resource'' when it agreed to buy 10 percent of Vancouver-based Ivanhoe in October 2006. Production would begin about 30 months after the contract was signed, Clayton said today.

    The government now has a ``clear'' electoral majority which makes the agreement's passage through parliament more likely, he said. The timing may enable Rio to begin development in the spring, Clayton said.

    Oyu Tolgoi, about 80 kilometers (50 miles) north of Mongolia's border with China, contains about 78 billion pounds (35.3 million metric tons) of copper and 45.2 million ounces of gold, according to Ivanhoe in March.

    That estimated metal content is ``a tiny fraction of what is actually there,'' Ivanhoe Chairman Robert Friedland said in June.