Australian coal miner Gloucester Coal Ltd. (GCL.AU) hopes to raise around 300 million Australian dollars (US$320 million) from an equity raising accompanying its A$600 million-plus bid for privately-owned Donaldson Coal Ltd., two people familiar with the matter said Friday.

Still, the raising could fall short of that mark, one person familiar with the situation said. Some investors have shown skepticism about the merits of the deal, which will switch Gloucester from a former strict focus on coking coal to a broader range of products.

A source close to the transaction said that the deal was now expected to close by Monday morning, but could not go ahead if Gloucester's independent directors were not convinced of the raising price.

"They will only do it at the right price. Otherwise they won't go ahead with the transaction," the person said.

The deal is part of Hong Kong-based commodities trader Noble Group Ltd.'s (N21.SG) long-standing attempts to build a significant presence in the Australian listed coal mining sector. Australia, the world's largest exporter of coal, is experiencing booming demand due to voracious energy demand from China's and India's industrialising economies and an expected medium-term rise in demand from Japan as a result of lower usage of nuclear power following the Fukushima Daiichi nuclear accident.

Gloucester went into a trading halt Monday pending the announcement of two acquisitions and a capital raising, which has since been extended twice. Citigroup Inc. (C) and UBS AG (UBS) are leading the raising.

Gloucester is looking to acquire Donaldson, which operates three thermal coal mines and has two mining leases in the Hunter Valley coal region in New South Wales state; and Ellemby, a company with historic links to Donaldson which holds two more mining leases close to Cessnock in the Hunter Valley.

The deal would also give Gloucester a prized stake in the Newcastle Coal Infrastructure Group, a company dominated by BHP Billiton Ltd. (BHP) which operates one of two terminals at Newcastle, the world's largest coal export port.

A stake in one of the two terminal operators is seen as a vital element of developing coal in the Hunter Valley, which is constrained by its lack of sufficient rail and port capacity.

"The current management believe this is a cracker of a transaction that's encouraging in terms of diversity, in terms of moving to multiple assets, multiple geographies and getting infrastructure," the source close to the transaction said.

Noble wholly-owns Donaldson and also has a controlling stake in Gloucester, and interests associated with Gloucester's chief executive Brendan McPherson own 20% of Ellemby.

Two of Gloucester's six-member board are senior Noble executives, and chief executive Brendan McPherson and two of the board's independent directors are former directors of Donaldson.

-By David Fickling, Dow Jones Newswires; +61 2 8272 4689; david.fickling@dowjones.com

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