Linc Energy is in early discussions to acquire a coalmine that is jointly owned by BHP Billiton and Mitsubishi, according to the Wall Street Journal.
The Brisbane-based company is looking to buy the Gregory Crinum coking coal complex in Queensland, unnamed sources told the newspaper.
The coalmine was shut last year because it was no longer profitable due to the high Australian dollar, falling coal prices and high mining costs.
Following the closure the BHP Mitsubishi alliance (BMA) hired UBS AG to find a buyer, with the nearby Crinum underground mine included in the sale.
BHP says that the complex has a mine life of four more years, with 8.3 million tonnes of coal remaining.
The news has not helped Linc's share price recover from its pummelling over the past three days. The company has slumped by 33.2% to 85 cents at 1330 AEST, having entered the S&P/ASX 200 on Monday.
In an announcement to the Australian Stock Exchange, Linc said it is not aware for any reason for the price change.
BHP has slid 1.5% to $30.88 at 1330 AEST.