Peabody Says Resource Tax Won’t Derail Macarthur Coal Deal

6 May 2010 (Last Updated May 6th, 2010 18:30)

Peabody Energy will proceed with its $3.8bn takeover of Australian coal miner Macarthur Coal despite the proposed 40% super profit resource tax that threatens to cut mining revenues significantly. Peabody Energy senior vice-president Vic Svec said the proposed tax means the company will t

Peabody Energy will proceed with its $3.8bn takeover of Australian coal miner Macarthur Coal despite the proposed 40% super profit resource tax that threatens to cut mining revenues significantly.

Peabody Energy senior vice-president Vic Svec said the proposed tax means the company will think more about the deal but it will not derail the acquisition process.

Svec told the Wall Street Journal the proposed tax lacks details at present and will undergo major changes before a final bill is passed.

Peabody could alter the terms of its all-cash bid submitted to Macarthur on 15 April in response to the tax.

Earlier, Peabody energy chief executive Gregory H Boyce indicated the company looked forward to advancing the deal to a successful conclusion.

The Australia Government wants to introduce a resource tax on mining profit. Rio Tinto has already put some of its Australian projects on hold, as has Cape Lambert.