Macarthur Coal, the target of a $4.7 billion takeover bid by US energy company Peabody Energy and steel giant ArcelorMittal, has suffered a steep slide in sales as a result of wet weather.
The world number one pulverized coal producer saw its sales in the June quarter tumble 22.5%, with annual sales down 26.5% to 3.9 million tonnes. Peabody and Arcelor have a sweetened deal following a couple of failed attempts in the past three years and is set to complete due diligence at the end of the week.
Pulverized coal attracts a premium on the market and is used as a replacement for coke in the production of pig iron.
Herald Sun reports Queensland’s summer floods and the Japanese earthquake and tsunami hit production and demand and Macarthur said the dip in demand had caused a decrease in prices for long-term volume contracts for the September quarter.
The Australian reported last week that the critical question is whether there are there any rival bidders in the wings. To that end, the spotlight is on Macquarie, which is understood to have pitched to potential rival suitors Xstrata and Rio Tinto and Macarthur’s 24 per cent Chinese shareholder, Citic.