India's state-owned metal and energy firms will decide this week whether they would combine their arsenal to counter the bid to Rio Tinto's $3.9 billion offer for Riversdale Mining Ltd.

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The Indian government has tasked International Coal Ventures Ltd. to come up with a viable proposal for the Sydney-based Riversdale Mining, known to produce steel-grade coal.

Bloomberg has reported that International Coal Ventures Ltd chairman C.S. Verma has confirmed that it is preparing to match or even come up with a higher bid offered by Rio Tinto at $16 a share.

"Our bid price for Riversdale will be higher than Rio Tinto's if it is to be a viable bid," Verma said in an interview with Bloomberg in Kolkata on Sunday.

Steel companies in India and China are competing for the strongest suppliers of steel-grade coal.

In a separate statement, Rio Tinto said its offer of $16 a share has received unconditional approval from Australia's Treasuer to buy Riversdale and it also received the endorsement of the Board on 10 January. Another shareholder, Tata Steel Ltd, which holds 24.2 percent of Riversdale said it had no "discomfort" with Rio's offer.

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