Macarthur Coal; Peabody Energy bets $5bn on future of coal | Macarthur Coal Limited ("Macarthur")

Macarthur Coal; Peabody Energy bets $5bn on future of coal | Macarthur Coal Limited ("Macarthur")

THE world's biggest coalminer has boosted Julia Gillard's efforts to sell her clean energy plan, signalling its confidence in the future of the industry under a carbon tax by launching a $4.7 billion takeover bid for Macarthur Coal.

Peabody Energy has teamed up with fellow Macarthur shareholder ArcelorMittal - the world's biggest steelmaker - to bid $15.50 a share in the biggest takeover offer made for an Australian coalminer.

The bid came only a day after the government launched its carbon tax plan, which was attacked by coalminers for failing to provide sufficient industry assistance. Miners warned that the package would force marginal operations to close.

It also came as Qantas and Virgin Australia yesterday quantified the impact of the carbon tax on their bottom-line profits and warned that they would be forced to pass on the cost to passengers through higher airfares.

Qantas shares fell below the $2 mark after it revealed the tax would cost it $110 million to $115m in the first year of the measure in 2012-13, contributing to a 1.6 per cent slump on the Australian stockmarket. Goldman Sachs analyst Hamish Tadgell said the carbon tax, at $23 a tonne in its first year, would reduce the earnings growth of S&P/ASX 200 companies by up to 0.5 per cent.

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Peabody bid undercuts Abbott's argument The Australian, 1 hour ago

Macarthur in play again with $5bn bid The Australian, 1 hour ago

Steel and coal giants bid for Macarthur Courier Mail, 1 hour ago

Joint bid for Macarthur Coal Herald Sun, 1 hour ago

Peabody's new Macarthur bid The Australian, 1 hour ago

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Responding to news of the Peabody takeover bid last night, Climate Change Minister Greg Combet said the government "has always said that the Australian coalmining industry has a bright future under a carbon price".

"The industry is profitable, prices are high and there is a sizeable pipeline of planned new investment," Mr Combet told The Australian. "The only person talking the coal industry down is Tony Abbott, who has made the reckless and untrue claim that a carbon price will destroy the Australian coal industry."

The Opposition Leader kick-started his election-style campaign against the carbon tax package yesterday at Peabody's Wambo Mine in the NSW Hunter Valley, telling workers he had "staked my political life, what's left of it, on stopping this carbon tax". "I figure for people in the coal industry, it's a hit on your potential employment and it's going to be a hit on your standard of living," he said.

Mr Abbott ruled out supporting $1.6bn in additional government assistance for the coal sector and steel industry, which was negotiated outside the framework of the multi-party climate change committee.

Greens leader Bob Brown is refusing to back $1.3bn in support for the coal sector, which would provide compensation to about 25 gassy coalmines in NSW and Queensland for fugitive methane emissions, but left open the possibility of supporting the $300m package for steelmakers. The government's extra support for coalminers is expected to be provided through financial grants and is unlikely to require specific legislation, but the steel assistance will need parliamentary backing.

Nationals senator Barnaby Joyce, who travelled with Mr Abbott to the Wambo Mine yesterday, said the takeover bid for Macarthur Coal would not dent the opposition's assault on the $23 carbon price. Read More