The company, which shelved a public offering in the wake of the financial crisis, could list as soon as May.
The mammoth IPO would make it the highest-valued stockmarket debut since Mexican silver miner Fresnillo, which floated for a staggering £4bn in May 2008, raising almost £1bn.
The board of Ferrous will hold a crunch meeting on Friday to decide whether to proceed with the ambitious listing now or wait and gauge the market further. The mining firm is said to be under pressure from investors, including hedge fund Harbinger Capital, to go ahead with the listing.
The firm has ambitious plans to increase its mining capabilities to 25m tonnes a year by 2013. But it is understood to be raising funds to bolster shareholder liquidity and is not expected to use the cash for development.
JPMorgan Cazenove is advising on the listing.