By Cecilia Connell

May 27, 2017 - Chinese-controlled company Yancoal has made a binding offer to acquire Mitsubishi Development's 32.4 percent interest in the Hunter Valley Operations mine site, north-west of Singleton.

The move fulfils Yancoal's obligation to make a tag-along offer to Mitsubishi under its agreement to purchase Rio Tinto's Hunter Valley business Coal and Allied, which was approved by the Foreign Investment Review Board last month.

The $3.2 billion Coal and Allied deal remains the largest acquisition by a Chinese Government entity of Australian assets to date.

Yancoal Australia chief executive Reinhold Schmidt said the latest offer was an important milestone.

"[It] sends a clear message to all stakeholders of Yancoal Australia's continuing investment into the local resources sector," he said.

The tag-along offer is dependent on regulatory approval.

Mitsubishi has until June 23 to accept.

Yancoal Australia, which already runs a handful of coal sites across the country, is owned by Chinese Government-controlled company Yanzhou Coal Mining.

The Coal and Allied sale incorporates a majority interest in several Upper Hunter coal mines including Mount Thorley, Warkworth and Hunter Valley Operations.