The China Post reports Mongolia's National Security Council has rejected a deal struck with foreign firms to develop the western block of Tavan Tolgoi in the South Gobi desert, the world’s largest deposit of high-quality coking coal used in steelmaking. Metallurgical coal has been trading at record levels of $330/tonne this year and the news is a blow to US mining giant Peabody Energy, China's Shenhua and a Russian-Mongolian consortium that were announced as winners in July. At the time the losing bidders from Brazil, India and South Korea were smarting and Japan went so far as to call the bidding process 'extremely regrettable'. Mongolia was hoping to privatize its Erdenes Tavan Tolgoi coal-mining company which controls the remainder of the 6 billion tonne resource for $3 billion next year.

Coal producers are benefitting from skyrocketing demand and improved pricing of late. Meanwhile, Coal shortages in China and India are directly assisting US exporters and have played a major role in the better pricing environment.

Peabody Energy Corp cut its third quarter and full year earnings outlook because of a roof fall at one of its Australian mines where production will be halted for four to six weeks.

The deal for Peabody Energy, the world's biggest private-sector coal company, and a partner to buy Australia's Macarthur Coal for more than $5 billion concludes more than a year of pursuit and continues widespread consolidation in that energy sector.

Anglo American is poised to lose out in the A$4.9bn (3.2bn) takeover tussle for Macarthur Coal after the Australian company recommended a sweetened offer from a consortium of US-based Peabody Energy and European steelmaker ArcelorMittal.

The battle for Macarthur Coal is poised to intensify after news that Anglo American is considering a challenge to Peabody and ArcelorMittal's $4.7 billion hostile bid. Anglos, the world's fifth most valuable miner, is studying Macarthur's finances, media reported at the weekend. Anglos has been restructuring aggressively under chief executive Cynthia Carroll (pictured) and with second quarter 2011 profits of $4 billion has the necessary cash. But a rumoured joint bid with China's Citic could turn out to be the decisive factor to beat Peabody and ArcelorMittal's offer as Citic has already built up a 24% stake in Macarthur. Miners are scrambling for coal assets and coal for power-generation has averaged about $130/tonne this year from less than $100 in 2010. Coal now accounts for 30% of global energy use, the highest since 1970.

Peabody Energy (NYSE: BTU) today announced a new licensing agreement with Yanzhou Coal Mining Company for the installation of its Longwall Top Coal Caving (LTCC) technology to enhance recovery of metallurgical coal at Peabody's North Goonyella Mine in the Bowen Basin, Queensland, Australia. Yanzhou is a subsidiary of Yankuang Group Co. Ltd.

Peabody Energy Corp. is leaving the door open for a rival bidder to step in for Macarthur Coal Ltd. by offering less for the Australian mining company than it did last year, even as profit is projected to double.

China Briefing News reports state-owned Shenhua, the leader of a joint Chinese, Mongolian, Russian, and US consortium awarded the western block of Mongolia's Tavan Tolgoi coking coal field – the world's largest – faces a rocky road ahead to bring the project to fruition. According to CBN the political structuring is typical but none of the three operators have given public explanations as to how they may proceed or even work together. While losing bidders from Brazil, India and South Korea are smarting, Japan have gone so far as to call the bidding process'extremely regrettable'. And all this while Mongolia hopes to raise as much as $5 billion privatizing Tavan Tolgoi early next year.

ArcelorMittal, Vale and Xstrata are among six bidders short-listed to develop Mongolia's Tavan Tolgoi mine, the world's largest untapped coking coal deposit, Mongolia said on Monday. U.S. coal miner Peabody , a consortium of Chinese energy firm Shenhua and Japan's Mitsui & Co , and a separate consortium of Japanese, South Korean and Russian companies are the other preferred bidders, said Erdenes MGL, the government body which controls Tavan Tolgoi.