Xstrata Coal is seeking a partner to sell its equity stake in the Donkin Coal project located in Nova Scotia, Canada.
Xstrata Coal chief executive Peter Freyberg said, "We will continue to work closely with Erdene and the Province of Nova Scotia to secure an operating partner to advance the project to production."
Xstrata Coal Canada which holds a 75% stake in the Donkin Coal Alliance and is the project manager and joint venture partner, while Erdene holds a 25% interest.
Erdene has a 60-day right of first refusal on the sale by Xstrata, which is expected to be completed this year.
The company plans to select a coal mining company to operate the underground mine.
It will also complete environmental assessment, engineering work and obtain necessary approvals for commencement of the underground exploration phase.
The Donkin underground mine will begin coal production by mid-2014 to produce 2.75 million washed product tonnes per year.