Rio and its Canadian subsidiary Turquoise Hill Resources are working on a new plan for the underground expansion of the Oyu Tolgoi copper mine, after project management shortcomings and geological problems caused massive cost and schedule blowouts.

Rio expects the $US5.3 billion ($7.8 billion) underground expansion budget will have to increase by between $US1.2 billion and $US1.9 billion, and fresh delays of 16 to 30 months mean the mine will be delivered seven years later than was envisaged in 2012.

Rio Tinto's Oyu Tolgoi underground expansion will cost more and take longer to build.

But Australian Foundation Investment Company (AFIC) chief executive Mark Freeman said his company's long term investment horizons ensured it would be patient on Oyu Tolgoi.

''That is just part of the ups and downs, Mongolia was always going to be a tricky place to invest,'' he said.

''When they look at the underground there is a great opportunity there, but I think we have been investing long enough to know that it is not going to be easy.''

AFIC owned $180.3 million worth of Rio's Australian shares and $495 million worth of BHP's Australian shares at September 30.

Mr Jacques was Rio's copper boss prior to becoming chief executive, and he personally negotiated the 2015 deal with the Mongolian government to restart work on the stalled underground expansion.

Golden era
''There is no surprise the company has issues, it is how they deal with it at the end of the day that is the key, and we have confidence they will work through that," Mr Freeman said.

The past three years have been a golden era of shareholder returns from the two big miners, with Rio returning $US13.5 billion to shareholders in 2018 while BHP returned $US17.1 billion in the year to June 30.

Those returns were warmly received by AFIC, which tends to focus on companies with a competitive advantage and that pay fully franked dividends.

''The iron ore price has been very good to them due to some unfortunate events in Brazil,'' Mr Freeman said in reference to the fatal dam collapse that forced Brazilian miner to curtail exports.

''We don't think that is sustainable so we are expecting over time that iron ore price will probably drift down and BHP and Rio might follow, but in the meantime you get some very strong cashflows out of these companies now producing a very strong dividend.''