While no formal agreement has yet been reached, Macmahon is keen to follow Peabody Energy into Mongolia, considered one of the emerging coal mining provinces in the world.

The deposit has the potential to produce 15 million tonnes annually for more than 30 years, enhancing Mongolia’s development as a major coking coal exporter to China. The mine also has an estimated 1.2 billion tonnes of reserves.

Last month Peabody firmly extended its reach into Asia after being awarded the rights to develop the Tavan Tolgoi deposit along with Chinese coal giant Shenhua and a Russian-Mongolian consortium.

Since the start of the 2012 financial year, Macmahon’s mining business has secured more than $1 billion of new contracts across a diverse range of commodities and locations.

Last week it announced mining contracts totalling $90 million, including predevelopment work adjacent to current operations at BHP Billiton Iron Ore’s Wheelarra Mine, constructing haul roads and run of mine pad and works at Newcrest’s Cadia Valley Operation, namely underground development works at the Cadia Hill Mine and at the Cadia East Project, which includes a ventilation adit.