In the latest developments, Deutsche Bank and Merrill Lynch are the forerunners to manage the listing and CICC, a local joint venture between the state-owned China Construction Bank and Morgan Stanley, is also set to be appointed as an adviser on the initial public offering, the Financial Times said.

Bloomberg said the deal would be worth as much as $70 million in fees, or 3.5% of the initial public offering's proceeds for the banks.

The Shenhua Group is state owned. The share sale will offer about a 25% stake in the company.

Shenhua produces more than 100 million tonnes of coal annually and is by far the largest producer in the country.