According to the ABC, Lanco said preliminary discussions were underway with "some strategic/financial investors" over a possible stake sale.

Last month Lanco flagged selling $US825 million worth of power projects with its debt position at around $5.9 billion in late March.

The Griffin mine, near Collie, is believed to be losing money as thermal coal prices continue to struggle.

“The 380-strong local workforce has downed tools at the mine site twice in the last three months over unpaid debts,” ABC reported.

“It is understood contractor Carna Civil and Mining pulled the workforce after Lanco Infratech failed to pay an outstanding debt of several million dollars.”

Collie-Preston state member Mick Murray reportedly said cost cutting had already been attempted.

"You know with overheads ... the losses continue so it's quite obvious now it's just they've decided to cut their losses and put it on the market,” he said.

Griffin has not yet responded to the report.

Lanco acquired the Griffin assets, a key part of former coal tycoon Ric Stowe’s failed business empire, in 2011.

In June it finally received state government approval to develop a $500 million export facility at Bunbury which could allow it to ramp up production to 15 million tonnes per annum.