Trading in Australia's Gloucester Coal was halted yesterday following reports that it is in talks to sell itself to Chinese state-owned Yanzhou Coal Mining.

Citing a person with knowledge of the matter, Bloomberg reported yesterday that China's fourth-largest coal producer Yanzhou Coal Mining Co plans to buy Australia's Gloucester Coal Ltd, in a $2 billion cash and stock deal.

In a statement to the Australian Stock Exchange (ASX), Gloucester said that it had requested trading of its shares be temporarily stopped "pending the release of an announcement by the company".

"Unless ASX decides otherwise, the securities will remain in trading halt session state until... Thursday 22 December 2011 or when the announcement is released to the market," it said.

The Australian Financial Review also yesterday reported that Yanzhou was attempting a backdoor listing for its existing assets in Australia through a proposed merger between Yanzhou Australian subsidiary Yancoal Australia and Gloucester.

The deal would require the approval of Singapore-based commodity trader Noble Group, which holds a 65-per cent stake in Gloucester Coal.

Sydney-based Gloucester Coal produces coking coal and thermal coal used for steel making and power generation. It produces both coking and thermal coal in the Gloucester Basin, along with semi-hard coking coal and low volatile pulverised coal Injection (LV PCI) from operations in the Bowen Basin.

It has a 50-per cent stake in the Middlemount coal project, which has resource of 122.6 million tons, with a recoverable reserve of 96 million tons.

With 2010 annual revenues of $56.7 billion, Nobel, a Fortune 500 company, is a market leader in managing the global supply chain of agricultural, industrial and energy products.

It manages a diversified portfolio of essential raw materials, integrating the sourcing, marketing, processing, financing and transportation through 100 offices in more than 40 countries.

Noble has interests in coal and iron ore mines, grain crushing facilities, sugar and ethanol plants, fuel terminals and storage facilities, vessels, ports and other infrastructure.

It sources raw materials from low-cost producers such as Brazil, Australia and Indonesia and supplies to high-growth markets including China, India and the Middle East.

Jining, Shandong-based Yanzhou Coal operates six coalmines in China and a regional rail network. Its wholly-owned subsidiary Yancoal Australia has coal assets in Queensland and New South Wales.

In September, it acquired two coal subsidiaries Wesfarmers Premier Coal Ltd and Wesfarmers Char Pty Ltd from Australia's Wesfarmers for A$296.8 million, its third acquisition in Australia since August.

It had in August acquired two Australian coal producers, Syntech Holdings Pty Ltd and Syntech Holdings II Pty Ltd, for a total of A$202.5 million ($222.08 million).