Apollo and CPP have teamed up with US coal company Xcoal Energy & Resources and a former Glencore executive to bid for the assets, Reuters quotes sources as saying.
New South Wales based producer Whitehaven Coal is also an interested party in the sale process, which is being conducted by Credit Suisse.
Reuters says Credit Suisse has nominated December 8 as a deadline for bids.
The successful sale of Kestrel and Hail Creek would mark Rio Tinto’s withdrawal from Australian coal. It managed, eventually, to sell its Hunter Valley assets in New South Wales to Yancoal for $2.69 billion earlier this year.
Apollo had been keenly interested in acquiring Anglo American’s key coal assets at Moranbah North and Grosvenor in Queensland but was thwarted when Anglo American CEO Mark Cutifani decided to hold on to the coal operations.
The Kestrel longwall mine, which has improved its productivity over the past three years, would be an attractive entry point for Apollo and the CPP into the Australian coal sector.