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The sale, which is being handled by Swiss bank UBS, is expected to conclude within the coming week, according to a report in US business newspaper Wall Street Journal.
A spokesman for Rio Tinto said that the company would not comment on speculation.
A slump in coking coal prices over the past year has seen Rio Tinto’s Mozambique coal business rack up growing losses in 2014.
The business has been plagued by high operating and infrastructure costs, with Rio Tinto writing down $470 million in impairments against its Mozambique coal business in 2014.
The miner started looking for buyers for its Mozambique coal assets less than three years after acquiring them from Riversdale Mining in April 2011 for $3.7 billion.
The miner has since suspended exports from its Benga mine several times following derailments on the Sena railway line, which links the coal-rich region of Tete to the port of Beira. Operations in the country have also been affected by security problems.
ICVL was set up in 2009 by the Indian government in a bid to secure 500 million tonnes of coking coal assets overseas for the country’s steel industry.
ICVL’s owners include Steel Authority of India (Sail), Coal India, Rashtriya Ispat Nigam, NMDC and National Thermal Power Corp.
The Mozambique deal, if successful, will be ICVL’s first acquisition.