Record Australia coal bid shows industry healthy

Embattled Australian Prime Minister Julia Gillard held up Tuesday a record five-billion-dollar bid for coal miner Macarthur as proof that her carbon tax on polluters will not kill the industry. Gillard, who unveiled her disputed new levy on the country's 500 top polluters on Sunday, used the bid by a consortium of US and European firms to hit back at opponents who claimed her tax would ravage the coal sector. "We are seeing the biggest takeover bid in Australian history for a coal company," she told public broadcaster ABC. "You couldn't get a better indication that business people see a good future in coal mining in this country." The prime minister's fiery riposte came after European steelmaking giant ArcelorMittal and US mining firm Peabody announced Monday they had joined forces to take over Macarthur Coal for Aus$4.68 billion ($5.0 billion). The move came as Australian miners, including a major coal industry body, warned the new tax would force mine closures and thousands of job losses, seriously damaging the industry that is a key driver of Australia's economy. "You have to track where the money is going ... it's going into buying an Australian mining business," Gillard said. "People would only do that if they thought it had a great future." Climate Change Minister Greg Combet also came out fighting for the tax that the government says will tackle global warming by reducing carbon emissions and ensure the country has a sustainable future. He disputed a claim by the Australian Coal Association (ACA) that the carbon tax package would wipe out 4,700 jobs. Combet said a Aus$1.3 billion package aimed at helping the industry absorb the tax would make sure that no jobs were lost. But the coal industry body ACA insisted the Macarthur deal was not a vote of confidence in the carbon tax, which is due to come into force on July 1, 2012 and will be accompanied by a raft of personal tax breaks to help shield voters from its inflationary effects. "Despite the carbon tax, which will cause high cost mines to close ... and will cause quite a few plant projects not to go ahead ... there are obviously some very valuable assets in Australian coal mining," ACA executive director Ralph Hillman said. "This is a massive industry, Aus$50 billion of export, 3.5 percent of the GDP," he told the AAP news agency. "We are still going to be a major exporter of coal." The timing of the bid for Macarthur was driven by the "internal dynamics" of deal itself, not by the carbon tax, which will be priced at Aus$23 per tonne, he said.