The second biggest mining group in the world, Anglo American, is believed to be at an advanced stage of talks to buy a share in Shenhua Energy, the largest coal producer in China.
According to a report from the FT, Anglo American is planning to pay $100 million to acquire a moderate stake in order to gain a foothold in the coal mining operation of the third largest country in the world.
The agreement would also enable the Chinese energy company to bolster its standing in international business circles ahead of its planned initial public offering later this year.
The strange quirk of the deal is that the $100 million, a considerable sum of money in most areas, is virtually an irrelevant side issue. More important is the agreement itself which acts as an access conduit for the western company and a gesture of confidence for the eastern company.
Anglo American is believed to have beaten off competition from fellow global mining groups Rio Tinto and BHP Billiton to gain pole position on the opportunity. The specific value of the deal is expected to be set when Shenhua determines its IPO price in June.