With coal markets tightening as China becomes a net importer of coal, the report said interest in Australian producers had increased.
"We would expect to see more M&A activity in the Australian coal sector as the major international mining companies look to grow and Asian power companies look to secure supply," UBS analysts Glyn Lawcock and Mark Busuttil said.
Just yesterday, Resource Pacific Holdings was targeted for takeover by fellow coal producer New Hope Corporation in a $A590.8 million deal.
"Over the last 18 months, Cleveland Cliffs acquired Sonoma, CVRD acquired AMCI Holdings, Peabody bought Excel Coal, Xstrata acquired Centennial's Tahmoor following a failed bid for Gloucester Coal, and KEPCO was reportedly looking to buy a stake in Felix Resources," the report said.
Queensland coal explorers Rocklands Richfield and Bowen Energy are still locked in takeover negotiations which will ultimately decide whether their coal supplies are sent to India or China.
In early September, Indian coking coal giant Gujarat NRE Coke announced it would merge its two Australian units to form single coal mining company,
strengthening its position in the global hard coking coal market.
The biggest constraint for Australian coal exports currently is port and rail infrastructure congestion, but current infrastructure expansion plans could see congestion alleviated over the next two years, the report stated.