Xstrata Coal is seeking an operating partner to divest its stake in the Donkin Coal project located in Nova Scotia, Canada.
The sale is expected to be completed this year, following selection of a coal mining company to operate the underground mine.
Erdene holds a 25% interest in the Donkin Coal Alliance with project manager and joint venture partner Xstrata Coal Canada, which holds a 75% stake.
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."
Erdene has a 60-day right of first refusal on the sale by Xstrata Coal of its equity interest in the project.
During this process the project timelines will be maintained, with the planned completion of the environmental assessment, progression of engineering work, and obtaining the necessary approvals for commencement of the underground exploration phase.
The Donkin mine will begin coal production by mid-2014 to produce 2.75 million washed product tonnes per year.