The future of Rio Tinto's NSW coal operations looks set to be resolved via a bidding war after commodities giant Glencore returned to the fray with a higher offer.
Glencore raised its offer for the Coal and Allied Industries unit to $US2.675 billion ($A3.53 billion) in cash after Rio Tinto rejected its initial approach in favour of a $US2.45 billion deal with Yancoal that has already secured regulatory approval.
Rio Tinto on Monday said its board will give the new proposal appropriate consideration.
It also flagged the likelihood of postponing Tuesday's general meeting, at which shareholders are scheduled to vote on Yancoal's bid, if Glencore's offer is considered superior.
Yancoal would then have two business days to respond and the meeting in London would be adjourned, Rio Tinto said in a statement.
Glencore made an initial bid of $US2.55 billion for the operations, which include majority stakes in the Hunter Valley Operations and Mount Thorley Warkworth mine, a 36.5 per cent interest in the Newcastle Port coal export terminal and other undeveloped coal assets.
However, Rio's board backed Yancoal because of the certainty of funding and regulatory approvals.
Glencore returned late on Friday and sought to address Rio's concerns about regulatory approvals from authorities in China and Australia by offering a $US225 million non-refundable deposit that it will forfeit if permissions are not received.
Royal Bank of Canada analyst Paul Hissey said he expects Rio Tinto's board to view the new proposal favourably.
The non-refundable deposit will likely remove uncertainty around the gaining and timing of regulatory approvals, he said, adding that the potential synergies for Glencore are estimated at over $US500 million.
At 1520 AEST, Rio Tinto shares were up 0.87 per cent at $59.34 in a flat Australian market.
Yancoal Australia shares were down 6.5 per cent at 29 cents each.
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