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Rio Tinto has ended months of speculation by confirming plans to swap its shares in Ivanhoe Mines for a direct stake in Mongolia's Oyu Tolgoi copper and gold project, 66 per cent owned by the Canadian miner.

Rio owns an indirect interest in Oyu Tolgoi, one of the world's largest undeveloped copper deposits, through its 29.6 per cent stake in Ivanhoe.

The mining group also confirmed in a US Securities and Exchange regulatory filing on Wednesday night that Chinalco, the Chinese aluminium producer which is Rio's largest shareholder, was interested in investing in the Oyu Tolgoi project, either directly or through buying an equity stake in Ivanhoe.

The end result of the talks could be a two-way or three-way agreement between Ivanhoe, Rio and the Chinese company, Rio said in the filing.

Rio last month paid $393m to exercise warrants that increased its stake in Ivanhoe to 29.6 per cent, from 22.4 per cent, but it still has enough warrants to increase its stake to 44 per cent.

Its existing stake in Ivanhoe would give the Anglo-Australian miner a direct stake of about 20 per cent in Oyu Tolgoi.

But analysts said Rio could exercise its remaining warrants to gain more direct control.

Rio added that any deal would require the support of the Mongolian government, which owns a 34 per cent stake in Oyu Tolgoi, which is expected to cost $4.6bn to develop.

Analysts have long expected Rio to do a share-for-asset swap since Ivanhoe passed a shareholder rights plan in May that in essence blocks all but a friendly takeover bid.

Rio is also blocked from mounting a full takeover bid for the Canadian miner through a standstill agreement but that deal expires next year.

Oyu Tolgoi, which is due to start up in 2013, is expected to produce 544,000 tonnes of copper and 650,000 ounces of gold a year over its first decade, and operate for at least 27 years.

If Chinalco invests in the Mongolian project, it would be the second tie-up involving the Chinese group and Rio this year.

In March, the two groups announced plans to form a partnership to develop the Simandou iron ore deposit in Guinea.

Chinalco, which owns 9 per cent of Rio, said that it would invest $1.4bn in the early stages of the Simandou project in return for a 47 per cent equity stake.