It is understood the Perth-based coal and iron ore miner – whose share price has taken a beating in recent weeks – is in talks with the South American company over its coal assets.

“The natural growth path for Vale is to acquire these coal assets which they already participate in,'' Aquila chief executive officer Tony Poli told Bloomberg yesterday.

“They don't need to do due diligence, they understand the assets.''

Vale holds a controlling interest in Aquila’s Belvedere coal project in Queensland and is an equal joint venture partner at the Eagle Downs project.

Any further asset buy ups by Vale would be in line with the company’s previously flagged multi-billion dollar acquisition plans.

Meanwhile any sell off by Aquila would generate valuable capital for a company that has seen its market value plummet in recent weeks.

While Aquila boasts around $A160 million in cash, stocks in the company have been on a downward spiral since late last month, falling from $10.36 on September 25 to $3.78 this morning. Shares were last trading at $4.05.

International Longwall News could not reach Aquila before publication.