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China’s Yankuang Energy Group made an offer in late May to acquire the 37.7% it does not already own in Australia’s largest listed coal miner at a 16% discount to the current market price for Yancoal shares.

The coal producer had formed an independent board committee to evaluate the offer, though it was reported that Glencore (LON: GLEN), which owns 6.4% of Yancoal, was ready to reject the offer as it “significantly” undervalued the stock.

Yankuang’s move was a clear attempt at boosting is stake close to the 90% ownership threshold which, according to Australian rules, would allow it to acquire all the small number of shares owned by two other investors and take Yancoal private.

Following the rejection, Yankuang said it was open to negotiations to acquire the remaining shares in Yancoal Australia.

A favourable deal would be a boon to Australia’s new prime minister, Anthony Albanese, whose government aims to repair ties with China.

A political dispute between Beijing and Canberra over a series of issues, including Australia’s call for an international investigation into the origins of the coronavirus pandemic, led to China telling traders and utilities to stop buying Australian coal.

The Asian nation is the world’s top importer of the polluting fuel, and Australia was its second-biggest supplier, behind Indonesia, up until the middle of 2020.

Coal supply is currently extremely tight, partly because Russia’s ongoing war in Ukraine keeps global demand and prices elevated. Flooding and labour issues at mines in Australia earlier this year are also weighing in.