St. Louis Business Journal reports Peabody Energy on Thursday received clearance from the Ministry of Commerce of the People’s Republic of China to proceed with its and ArcelorMittal’s $4.7 billion takeover bid for Macarthur Coal Ltd. in Australia.
The Macurthur deal is good news for the US giant after it recently lost out on a chance to co-develop the world’s largest deposit of high-quality coking coal.
Miners are scrambling for coal assets and coal for power-generation has averaged about $130/tonne this year from less than $100 in 2010 while metallurgical coal has been trading at record levels of $330/tonne.
Mongolia's National Security Council rejected a deal struck with Peabody Energy, China's Shenhua and a Russian-Mongolian consortium mid-September, just two months after they were announced as winners.
Mongolia last Friday said it is relaunching talks with international miners on developing, the western block of Tavan Tolgoi in the South Gobi desert.
Mongolia also still hopes to privatize its Erdenes Tavan Tolgoi coal-mining company which controls the remainder of the 6 billion tonne resource for upwards of $3 billion next year.
Coal accounts for over 40% of total global electricity generation. Global coal consumption advanced 7.6% last year and at a faster pace than crude oil, natural gas and nuclear, according to statistics published by oil giant BP.