A Japanese-owned WA power station is moving to take over an Indian-owned coal mine. 

The Bluewaters power station - owned by conglomerate Sumitomo and backed by a group of US ‘vulture’ funds - is seeking to trigger step-in rights to take over Griffin Coal's mine near Collie, 180 kilometres south of Perth.

Griffin, which is owned by Indian interests, has been plagued by years of instability, and is believed to have racked up losses amounting to more than $1 billion in just over a decade.

Bluewaters wants to take control of the mine to end months of disruptions to its coal supply.

The 440MW power station is Australia's newest and one of the biggest generators in WA's main electricity grid, which services the south-western corner of the state.

The station typically supplies up to 15 per cent of the system’s electricity generation, selling to industrial customers including gold miner Newmont and state-owned utilities.

But records from the Australian Energy Market Operator (AEMO) show output from Bluewaters' two units has dramatically dropped in recent months. 

The company is now seeking to appoint a controller to run the Griffin Coal mine.

“This action follows Griffin defaulting on its contractual obligations to Bluewaters, due to its continuing inability to deliver coal in the quantities set under the supply agreements,” a spokesperson said.

“Griffin has applied to the court to issue an injunction against the appointment of a controller and the matter is expected to be determined by the court in the following days.

“The rationale of the controller appointment is to enable additional capability and funding to reinstate full coal supply to Griffin's customers from its Ewington mining operations in Collie. 

“The controller will work closely with Griffin employees and contractors to return operations to a safe, stable, productive mine.”

Reports say Griffin Coal was able to delay the control bid by Bluewaters after a mystery creditor emerged with a rival plan, but no details have been made public yet.