Last week, Macquarie filed a suit in the Federal Court against 71% Rio Tinto owned Coal & Allied Industries over its recent acquisition of coal assets from the Peabody group. Coal & Allied’s $1 billion deal to buy Peabody's stake in five mines was cleared in January by the Australian Competition and Consumer Commission (ACCC).
But Macquarie has claimed the deal reduces competition in the domestic coal supply market. Of Macquarie’s 12Mt of Hunter Valley coal, Peabody has supplied 60% in recent years.
Maquarie also filed a suit in the New South Wales Supreme Court to determine the validity of a tender to supply coal. Prior to the sale taking place, Macquarie accepted a tender from Peabody Resources which was subsequently withdrawn by Coal & Allied.
The changing in ownership of the Peabody assets could have other fall-out, too. ILN understands Peabody had long-term arrangements with Dyno Nobel to supply its open-cut operations with explosives. This arrangement could be under threat under Rio Tinto, which has long-term alliancing arrangements with Orica, already the dominant explosives supplier in the region.