Banpu approached Hunnu about a takeover bid last week, with discussions continuing into the weekend, according to reports in The Australian Financial Review.
Hunnu requested a trading halt last Friday, which is expected to last until tomorrow pending the announcement of a “potentially significant corporate transaction”
The newspaper reported a source close to Banpu said the offer would be “very similar” in structure to the $2.5 billion bid it made for Centennial Coal last year.
The successful all-cash offer for Centennial made Banpu the largest supplier of coal for power generation in New South Wales.
Banpu gained a 12.39% stake in Hunnu last March, making it Hunnu’s largest shareholder.
Mining at Hunnu’s flagship project, Tsant Uul, in the South Gobi coal province could begin as early as next year after a mining licence for the project was granted in July this year.
Tsant Uul has a targeted production of 1.5 million tonnes of coal for 2012. It is close to the giant Tavan Tolgoi coking coal deposit, which is tipped to produce 15Mtpa for more than 30 years.