China's MMG Ltd confirmed it was in talks with Glencore Xstrata to buy the Las Bambas copper mine in Peru, Reuters reported.
The deal, if it is completed and agreed to, is expected to cost more than $5 billion.
Glencore is required to offload Las Bambas as part of an agreement it made with China to win approval for its $47 billion take over of Xstrata in 2013. China, which is the largest consumer of copper in the world feared the merger would give the combined company too much control over the copper market.
MMG, the Australia-based offshore arm of Chinese state-owned Minmetals, said it was bidding alongside China state-owned giant CITIC Group and Hong Kong-registered Guoxin International Investment Corp. for the mine.
"No binding agreement has been reached in connection with the acquisition as of the date of this announcement," MMG said in a statement to the Hong Kong stock exchange.
Sources told Reuters that the Chinese consortium's representatives were set to meet with a Glencore delegation in London, and an agreement could be reached as soon as this week.
If the long-awaited deal goes through, it would be China's biggest mine acquisition worldwide and would help satisfy the country's hunger for the metal used in everything electrical and in plumbing as its cities rapidly expand.
The acquisition would be key to meeting MMG's target of becoming a top mid-tier diversified miner within the next few years.
Las Bambas is expected to produce around 450,000 tons of copper a year for the first five years. By comparison, MMG last year produced 188,000 tons of copper from its mines in Australia, Laos and the Democratic Republic of Congo.
Glencore spent $1.7 billion on construction at Las Bambas in 2013 and has forecast a further $2.4 billion would need to be spent ahead of first production in the second half of 2015.