Whitehaven Coal has held talks with China's largest coal company, Shenhua Group, about a deal that could help it get embattled entrepreneur Nathan Tinkler off its share register.
Whitehaven confirmed on Wednesday that it had spoken to Shenhua, in discussions believed to revolve around the Chinese group selling its NSW Watermark coal assets in exchange for equity, or alternatively acquiring Whitehaven.
The negative publicity about Mr Tinkler's cashflow crisis that threatens the liquidation of his companies and the existence of the two football clubs he owns has also caused Whitehaven's share price to dive.
The company's stock has plunged 40 per cent from their April highs, reducing the value of Mr Tinkler's 20 per cent stake from above $1 billion to less than the $700 million in loans he is estimated to carry.
They shot up in value on Wednesday, by 24 cents, or 7.5 per cent, to $3.45, making it the best performer on the ASX100.
A successful acquisition or investment would require the approval of Mr Tinkler or his key lender Farallon Capital but would give him desperately-needed cash.
Mr Tinkler failed this year in his own bid to take over Whitehaven.
Mr Tinkler's financial problems and attempted coup against Whitehaven's board overshadowed the positive milestones achieved by the miner in 2012.
Patersons Securities analyst Matthew Trivett said the securing of $1.2 billion in financing and approvals for the massive Maules Creek project - close to Shenhua's assets - this year added to the company's attraction.
"Maules Creek is the jewel in the crown that is going to underpin Whitehaven Coal's growth profile over the next five years and they have got offtake agreements there with other shareholders (Japan's J-Power and Itochu)," he told AAP.
"It is not hard to imagine that Whitehaven is quite attractive to some of these other players.
"I think Whitehaven would prefer cash than any other scrip offer."
The miner released a statement confirming discussions with Shenhua about possible asset transactions or other opportunities, but said that it routinely did so with coal companies.
It said that while there were some synergies with Shenhua with their Gunnedah Basin assets, it had not received any proposal from the Chinese miner.
"Whitehaven has had no proposals from Shenhua to sell its assets to Whitehaven, nor has there been any proposal from Shenhua to acquire Whitehaven," Whitehaven said in a statement on Wednesday.
Coal miners struggled in 2012 as weak global growth and demand sent prices down.
They have recently slightly improved, adding to Whitehaven's value, with the benchmark Newcastle thermal coal price back above $US90 ($A85.77) a tonne from below $US80 ($A76.24).
Hard coking coal is still considered weak at about $US160-$US170 a tonne but recent rises in iron ore prices indicate that coal will follow as another steelmaking ingredient.
A takeover by foreign state-owned Shenhua of Whitehaven would require regulatory approval.
Mr Trivett said he did not think Shenhua would have any problems, pointing to the huge amount of large Chinese investment in the Australian resources space already occurring.