Despite the impending doom being spelled out by analysts against the mining tax and carbon tax, the coal industry in Australia has projects worth $15.9 billion under construction. There is also the hope that by the financial year 2015-16 exports of coal will be up by 60%.
The joint bid by Peabody Energy and ArcelorMittal for Queensland's Macarthur Coal coming just a day after the carbon tax was announced by the Gillard government makes it difficult for the tax protestors to say that the coal industry is being put at financial risk.
Peabody Energy is making a $4.7 billion bid for Macarthur Coal along with ArcelorMittal. Currently the steel making company ArcelorMittal owns 16% of Macarthur Coal. For the bid to be successful they need to secure 50.01% stake in the company.
Robert Edel, the DLA Piper resources specialist said that this takeover bid proved that while the carbon tax was not great for the coal industry, it was not going to kill it. He added that high quality assets such as those owned by Macarthur Coal will always be in demand and can be profitable even with a carbon tax.
As per Edel the government needs to be careful. Acting unilaterally on a carbon tax places the Australian mining industry at a significant disadvantage to its competitors in other countries. Rising costs, infrastructure bottlenecks and the introduction of the new mining tax as well as a carbon tax makes us less attractive to international investment day by day.