On Wednesday, Winsway said the two entered into a non legally-binding memorandum of understanding for the deal and would formally establish the JV once definitive documentation was signed. It would release the terms of the JV at that time.

In the meantime, Winsway has invited a Peabody representative to be present at its board meetings as an observer.

Peabody had not made a public statement on the teaming at press time.

In July, the two companies entered into another JV agreement in Mongolia, creating Peabody-Winsway Resources, after Winsway purchased a 50% interest in the JV formerly owned by Polo Resources.

Peabody completed Mongolia’s first coal mine restoration project at the former Ereen Mine near the city of Bulgan in the north.

“We continue to extend our hand of friendship to help the Mongolian people unlock the energy and economic benefits of their vast coal reserves in a way that preserves their rich environmental and cultural heritage," Peabody chairman and chief executive officer Gregory Boyce said at the time.

Winsway is a supplier in China of imported coking coal and in particular, the largest offtaker of Mongolian coking coal in 2009.

It distributes and transports coal from Mongolia and other countries into China through its integrated service platform which includes logistics parks, coal washing plants and road and railway transportation capabilities along the coast, rivers and inland borders of China, including inner Mongolia.

Peabody president and chief commercial officer Richard Navarre said Peabody-Winsway Resources held coal and uranium licenses in Mongolia and was conducting an active exploration program in the South Gobi region and throughout Mongolia.