The China Exim Bank is reportedly looking into providing funds and equipment in return for coal, in a bid to tackle a country wide shortage of affordable energy.

Despite sitting $US9.4 billion ($A10.05 billion) in the red, Mechel is looking to expand its site at Elga, one of the largest reserves of coking coal in the world.

Elga is located in southeastern Yakutia, about 415km east of Neryungri.

Mining started at the deposit in 2011. In the same year transport began at the 321km railway built by Mechel, which links the deposit with the Baikal-Amur Mainline.

According to the revised license conditions, the first stage of the 9 million tonne washing complex’s construction must be completed no later than August, 2017.

"Some of the equipment will be supplied by China and coal exports will go in part to China," Vnesheconombank's management board deputy head Alexander Ivanov told reporters in Moscow on Monday.

Development of the project in the remote Yakutia area has long been stagnated due to poor transport links.

It is believed the companies have been in talks for a while and are close to reaching a loan deal. The amount of money due to be changing hands will be disclosed to shareholders once a deal is finalised.

Analysts predicted last year development of the Elga project will cost between $US2 billion and $US4 billion.