Rio Tinto is to push ahead with its most important growth project after striking a deal with the government of Mongolia to solve the key issues that have dogged the $7bn expansion of the Oyu Tolgoi copper mine.

The Anglo-Australian miner on Tuesday said it would start an underground caving process — known as undercutting — in the “coming days”, putting the mine in the Gobi desert on track to start production in the first half of next year. Rio had previously refused to start the undercut until it had resolved several issues with the government.

The deal comes days after the government of Serbia put Rio’s $2.4bn Jadar lithium project on ice. As such, the agreement will be a relief for chief executive Jakob Stausholm, who has laid out an aggressive plan to align the company with the decarbonisation of the global economy.