MELBOURNE, April 18 South32 Ltd on
Tuesday killed a $200 million deal to buy Peabody Energy's
Metropolitan coal mine in Australia after running into
competition concerns about supply of coal to local steel makers.
South32, which had been pursuing its first acquisition since
being spun off by global miner BHP Billiton,
said it was unwilling to take the steps required to appease
Australian steel makers to get the deal over the line.
"To proceed with the acquisition, in light of the
anticipated concessions, would have compromised the merits of
the transaction and this is not something we are prepared to
do," South32 Chief Executive Graham Kerr said in a statement.
The decision comes just as Peabody has emerged from
bankruptcy. The company said it was surprised that South32 and
Australia's competition watchdog had reached an impasse over the
"On the other hand, we see continuing opportunities given
Metropolitan's quality coking coals and port location, and our
objective will be to operate the mine while maximizing returns
in the international marketplace," Peabody President Glenn
Kellow said in a statement.
Peabody said it would keep the 2 million tonnes a year
coking coal mine and its 16.67 percent stake in the Port Kembla
coal terminal and would resume shipments after completing a move
to a new coal panel in the mine at the end of May.
(Reporting by Sonali Paul; Editing by Stephen Coates)