Australia may yet have its biggest independent listed coal miner after shareholders of Gloucester Coal gave their unanimous approval today to its proposed merger with China's Yancoal Australia.

Both coal companies, as far as December 2011, have expressed agreements to a potential tie-up which will combine the Ashton mine of Yancoal Australia with the coking and thermal assets of Gloucester Coal. Ashton mine is located in the Hunter Valley of NSW, while Gloucester Coal's coking and thermal assets are also found in the same state and also in Queensland.

Gloucester Coal shareholders gave their thumbs up to the proposal by 99.98 per cent, the company said in a statement on Monday, where they expect to collect $639 million, or $3.15 per share, as part of the deal submitted by Yancoal Australia.

The merger, which will be named Yancoal, expects coal production to jump from 12 million tonnes today to 25-33 million tonnes a year by 2016. It the biggest investment so far by a Chinese state-owned firm in Australia's coal industry.

Parent Yanzhou Coal will control 78 per cent of the shares of Yancoal, Singapore-based commodities trader Noble Group owning another 13 per cent while the rest will be owned by Gloucester Coal shareholders.

Yancoal's total resource base will now become approximately 3.5 billion tonnes of coal, with reserves of almost 700 million tonnes. Its total asset base will be valued at over $8 billion dollars, with $1.8 billion of revenue, earnings before interest tax depreciation and amortization of $687 million.

Australian Treasurer Wayne Swan as well as the Australian Foreign Investment Review Board have both approved the union. Although Chinese regulators have yet to stamp its approval, Gloucester Coal affirmed the conduct of negotiations was progressing well.