Asian demand for commodities is boosting coal prices

The bid of A$2.85 per share tops a rival offer by New Hope Corp of about A$2.30 per share, or 0.94 of its shares for one of Resource Pacific's.

Rising coal prices have heightened interest in Australia's mining sector.

Xstrata's bid for Resource Pacific follows its A$3bn bid for nickel miner Jubilee Mines.

"We have given shareholders very, very significant value right up front and we have tried to put such a price on the table that we can finish this quickly," Xstrata Coal chief executive Peter Coates told reporters.

Shares in Resource Pacific closed 3.44% higher at A$3.01.

Spending spree

Resource Pacific managing director Paul Jury said he would look at the bid before making a recommendation to shareholders.

New Hope says it is reviewing its options.

Xstrata has been on a buying spree in recent months, hoping to capitalise on rising demand for commodities from Asian economies such as China and India.

Earlier this year, Xstrata was trumped in its efforts to take control of Canadian nickel miner LionOre by Russian outfit Norilsk.