Riversdale was placed in a trading halt this morning after news about the offer was reported in The Australian.

Just days after rumors emerged that Drummond was considering selling a stake in its Colombian operations, Xstrata and Rio Tinto have also reportedly submitted bids to purchase the Alabama-based producer’s South American mines.

UK newspaper the Daily Mail quoted anonymous sources familiar with the deal as saying that the companies submitted £5 billion ($US7.8 billion) bids prior to a deadline earlier this month which was set by Drummond adviser Bank of America Merrill Lynch for assets including a mine, railroad and port facilities.

Rio Tinto and Xstrata did not provide public comment to media outlets, and Drummond spokespeople could not be located to make comment to ILN by press time.

The Mail noted that Brazil-based Vale and US-headquartered Peabody Energy might also be interested in the assets, though the sources did not know if bids had been submitted in the second round.

According to an updated Mail report Monday afternoon, Drummond chief executive Garry Drummond turned down three previous rounds of takeover discussions because the price point was unsatisfactory.

Xstrata is reportedly believed to be the most interested suitor at this time. The world-leading coal exporter already owns part of the Cerrejon mine and Prodeco complex in Colombia.

Bloomberg reported last week that Drummond Coal has been considering a minority stake sale in its South American coal mines as an alternative to selling the entire unit to another operator.

Drummond – which owns mining complexes in the US as well as Colombia – had held preliminary discussions with privately held Riverstone Holdings and First Reserve for a stake sale, though it was not known when the talks took place.

The report also said that at the time Drummond was still evaluating a sale of its entire Colombian business unit, reportedly worth more than $US6 billion, and expected to make a decision before the end of the year.

Drummond confirmed in July that it was considering a partner to help improve its capital access as it expanded both port capacity and production output. One scenario being considered is a significant expansion to the annual capacity of its El Descanso operation to 25 million tonnes in the next three years.

Shoal Creek, which utilizes continuous mining and longwall methods, is Drummond’s only US operation. Its assets in Colombia, where the company has had a presence since the 1980s, include the Pribbenow and El Descanso mines, and the Dupela deepwater ocean port.

According to the 2010 BP Statistical Energy Survey, Colombia produced 72.1Mt coal in 2009, 1.37% of the world total. Its reserves make up just 0.82% of the world total, but are the second-largest reserves in South America behind Brazil.

In total, Colombia has an estimated 24 billion tonnes of proven and potential coal reserves.