An Indian state consortium is weighing up whether to make a rival bid for Riversdale Mining, a day after Rio Tinto upped its offer for the firm.
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.
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," Bhattacharyya told Reuters.
"Citi's mandate is to tell us whether we should consider a big higher than $3.9bn."