Australian coal miner Coronado Global Resources said Tuesday it is in confidential discussions with Peabody Energy (NYSE:BTU) about a potential merger deal, Reuters reports.

Coronado, which owns coal mining facilities in Virginia and West Virginia states, said no agreement has been reached with Peabody (BTU) and it did not disclose any details on a potential deal.

Shares of both companies have posted strong rallies this year as coal prices have climbed; as of Tuesday’s close, Peabody’s (BTU) market capitalization totaled $3.8B, and Australian-listed Coronado was valued at A$3.26B (US$2.05B)

Coronado held merger talks with US-based peer Arch Resources earlier this year but no agreement was reached.

Some analysts believe Peabody Energy’s (BTU) free cash flow and earnings will fall off a cliff next year, but meanwhile coal prices in the US are hitting record highs, Michael Wiggins de Oliveira writes in an analysis published recently on Seeking Alpha.