An Indian state consortium is considering making a rival bid for Riversdale Mining, a day after Rio Tinto upped its offer for the firm.
On Thursday, Riversdale's directors said they would be recommending Rio's improved $3.9bn (£2.5bn) offer to shareholders.
Partha Bhattacharyya, chairman of Coal India, one of the consortium's members, said Citigroup was advising the group.
Sydney-based Riversdale has large coking-coal projects in Mozambique.
The Indian group, International Coal Ventures Limited (ICVL), consists of Coal India, utility NTPC, iron ore miner NMDC, Steel Authority of India and steelmaker Rashtriya Ispat Nigam.
"All the companies in ICVL are strong financially. Funding will not be a problem," Mr Bhattacharyya told Reuters.
"Citi's mandate is to tell us whether we should consider a bid higher than $3.9bn."
Riversdale's largest shareholder is India's Tata Steel. Reports suggest Tata may be included in the joint bid or may support the bid, but Mr Bhattacharyya said ICVL was not in formal talks with Tata.