The parties are preparing to enter the second round of the sale process, which is being conducted by Credit Suisse. 

These would include management presentations and site visits, before deciding on final bids, the Bloomberg report said quoting unnamed sources.

New York-based Apollo is reportedly bidding with Xcoal Energy & Resources and the Canada Pension Plan Investment Board.

The sale of Rio Tinto’s assets includes the Valeria and Winchester South coal projects and the Hail Creek open cut coal mine in Queensland.

The successful sale of Kestrel and Hail Creek would mark Rio Tinto’s withdrawal from Australian coal. It managed, eventually, to sell its Hunter Valley assets in New South Wales to Yancoal for $2.69 billion earlier this year.

Apollo had been keenly interested in acquiring Anglo American’s key coal assets at Moranbah North and  Grosvenor in Queensland but was thwarted when Anglo American CEO Mark Cutifani decided to hold on to the coal operations.

The Kestrel longwall mine, which improved its productivity over the past three years, would be an attractive entry point for Apollo and the CPP into the Australian coal sector.