(CNN) -- Shares in Anglo American climbed as much as 12 percent Monday after rival Xstrata said it was seeking a merger of equals.
Mining company Xstrata has proposed a merger with rival Anglo American.
Xstrata, the world's largest exporter of coal for power stations, said in a statement Sunday that it had sent a written proposal to Anglo American seeking a merger.
The move gave Anglo's shares a much needed fillip, leaving them nearly 6 percent higher on London's FTSE 100 by the end of Monday morning.
However investors did not show the same enthusiasm for Xstrata's shares, which were nearly 4 percent down in late morning trading.
Xstrata said it believed a merger -- which would value the combined company at $68 billion based on Friday's closing prices -- was "highly compelling."
"The combination would create a premier portfolio of operations diversified across multiple commodities and geographies, with enhanced scale and financial flexibility to fund future growth," the company said.
Xstrata said it had already quantified substantial operational synergies that were not available to either company operating alone.
"Xstrata is seeking to engage with the Board of Anglo American regarding a merger of equals that would realize significant value for both companies' shareholders."
David Buik, of BGC Partners, told CNN a deal would be complicated but there were obvious benefits to be had.
He said a merger could result in $1.7 billion in savings over the next few years.