Tax cuts the price of MacArthur Coal

MacArthur coal open cut

The Prime Min­is­ter is say­ing that today’s Peabody bid for Macarthur Coal demon­strates that the Gillard/Brown “coal tax” has not hurt the prospects of the Aus­tralian coal indus­try. But today’s Finan­cial TImes reveals that the Labor gov­ern­men­t’s tax­es are hav­ing an impact on the val­ue of Aus­tralian resource assets. Peabody has cut its offer price for Macarthur:

Peabody last year offered as much as A$16 a share for Macarthur. But it cut that to A$15 a share after the Aus­tralian gov­ern­ment announced plans for a so-called “super prof­its tax” on resources com­pa­nies. That tax has been watered down. But Aus­tralia is now push­ing for a car­bon tax, which could low­er prof­its on coal min­ers.” Extract from Peabody in new Macarthur move —

The bid is being dri­ven by grow­ing Chi­nese coal demand, of course, rather than the cost of Aus­tralian sup­ply. Peabody has been after Macarthur for more than a year. The US min­er is now offer­ing $15.50 per share, accord­ing to the FT

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