Shares in the company have surged more than 6% this morning on the news and as its chairman John Conde and managing director Tony Haggarty delivered their reports to the company’s annual general meeting in Sydney.

In August this year Whitehaven announced it had in been discussions with third parties in relation to potential corporate transactions and that those discussions that were continuing were preliminary and incomplete.

This followed speculation that a number of global parties were in discussion for a takeover, including US-based Alpha Natural Resources.

A “formal process” will determine whether a proposal is available for the company at a price and on terms that are in the best interests of all shareholders and that will cause less disruption to the conduct of its day-to-day business.

Selected parties will be invited to conduct due diligence and submit proposals to the board for its consideration.

“The Whitehaven board believes that Whitehaven has significant strategic value,” Haggarty said.

“It is one of Australia’s few remaining substantial independent coal producers.

“It has a very large resource of high-quality coal, is the leading producer in the Gunnedah Basin region of New South Wales and has substantial port and rail access.

“This strategic position, combined with the company’s strong growth prospects continue to prove attractive to a number of participants in the global coal mining industry.”

The formal process is expected to take a number of months and may or may not result in a proposal being made or recommended by the board.

If a proposal that appropriately reflects Whitehaven’s strategic value is not forthcoming, Whitehaven will continue as an independent company, Haggarty said.

There have been ongoing discussions surrounding the provision of transport infrastructure to the Gunnedah Basin and Hunter Valley coalfields and a cessation of negotiations with the New South Wales government over mining Cobbora, Conde told today’s AGM.

“Whitehaven’s significant management focus on this critical aspect of the supply chain, along with our investment in NCIG, our existing rail allocations, and our investment in additional train capacity has ensured that we have appropriate infrastructure to meet our planned FY11 production and shipping targets,” he said.

“Over the past year, the company has been involved in discussions with the NSW government in relation to the proposed Cobbora coal mine project. There has been press speculation in relation to Whitehaven’s potential involvement in this project; however, I can confirm that discussions between Whitehaven and the NSW government relating to the project have ceased.”

Whitehaven’s shares were up by 40c to $6.79 in morning trade.