If the deal goes ahead, GVK will join another Indian entrant in the Galilee, Adani Enterprises, which paid $500 million for Linc Energy’s Carmichael prospect last year and is a frontrunner to buy the Queensland government’s Abbot Point Coal Terminal, estimated to be worth $2 billion.

The Australian newspaper has reported that GVK and Hancock Prospecting last week signed an agreement under which the two companies will continue until mid-May exclusive negotiations for the purchase of the mines.

The two mines have a total resource of more than 7 billion tonnes of coking coal and both are estimated to be able to produce 30Mtpa of coal for 30 years.

GVK is believed to be conducting due diligence on the sale with Ernst & Young and seeking to raise the funds for the deal. It is believed to be made up of about $2 billion for the two mines, with the associated infrastructure to rail the coal 500 kilometres to the port and on to power stations in India making up the rest of the price.

GVK was beaten last year in its bid for Griffin Coal's holdings in Western Australia by another Indian company, Lanco Infratech, which paid $800 million for the assets.

Clive Palmer was quoted in The Australian as saying that his China First company and Adani would hold talks later this week about common-user infrastructure to Abbot Point.

Adani has submitted its draft terms of reference to the Queensland government for its $10 billion-plus, 60Mtpa Carmichael open cut and underground coal mine and rail project.

Located in EPC 1690, the project is about 100km north of Emerald.

Adani is targeting a mine life of 150 years with thermal coal production to peak at 60Mtpa.

Mining is expected to consist of six pits of “combined open cut and underground workings” to produce up to 10Mtpa each over a stretch of land 45km long.

Bandanna Energy, which also has holdings in the Galilee Basin, is also considered a likely takeover target.