Noble, which is listed on the Singapore stock exchange, asked for its shares to be suspended on Wednesday and Gloucester has been in a trading halt since the beginning of the week.

"Gloucester expects to make an announcement in relation to a potential merger proposal which will end the suspension," Noble said in a statement.

Yanzhou Coal Mining Co was suspended from trade this week in Shanghai and Hong Kong "pending a price sensitive announcement".

If successful the merger – which is expected to be by scheme of arrangement – would create the largest Australian independent coal group.

The merged companies would have a strong presence in the Hunter Valley of New South Wales, with combined coal production of 15 million tonnes per annum.

The merger would also provide Yancoal with a convenient backdoor listing on the Australian Securities Exchange.

Yanzhou must float off 30% of Yancoal as one of the conditions imposed by the Foreign Investment Review Board when it bought Felix Resources for $3.2 billion in December 2009.

The deal would value Gloucester Coal at approximately $2 billion.

Gloucester Coal has been growing rapidly through acquisitions, doubling its output to 6Mtpa – 55% thermal and 45% coking coal – through the $585 million acquisition of Donaldson Coal this year.

Yancoal operates four mines in Australia and reported a net income of $415 million last year.