Peabody Energy Corp. (BTU) and ArcelorMittal's (MT) takeover bid for Macarthur Coal Ltd. (MCC.AU) could trigger a sale of the miner's stake in the Monto thermal coal project to commodity trader Noble Group Ltd. (N21.SG), according to a target statement from Macarthur released Monday.

Peabody and ArcelorMittal last month secured the support of Macarthur's board for its A$16-a-share cash offer, which values the Brisbane-based company at A$4.83 billion. Macarthur is the world's largest producer of pulverized coking coal, a low-cost variety of coal used in steelmaking, by volume.

Located in Queensland state, Monto is the second-biggest coal resource in Macarthur's portfolio after the West Rolleston deposit. Monto has 328.4 million metric tons of coal resources, with Macarthur's share amounting to 134.6 million tons of that total.

Such a sale would add to Hong Kong-based Noble's growing portfolio of Australian coal assets, mostly now held indirectly through its 63%-controlled Gloucester Coal Ltd. (GCL.AU). Gloucester's current resources amount to 340 million tons, according to its preliminary annual report last month.

Monto could produce 1 million tons a year of thermal coal from around 2015, with capital spending estimated at A$80 million, according to Queensland's state government. Macarthur considers the project--which was halted in 2003 and is embroiled in a court battle between its joint venture owners--to be under evaluation.

Macarthur and Noble hold a controlling 51% stake in the mine through their joint venture, Monto Coal 2. Macarthur's target statement says a successful takeover by Peabody and ArcelorMittal would give Noble the option, but not the obligation, to buy Macarthur's 80.39% share in Monto Coal 2 at fair market value.

The junior partners in the Monto mine, a series of trusts, have brought legal action against Macarthur and Monto Coal 2 over the decision to stop work on the mine in 2003 and are seeking damages of A$1.19 billion.

A spokesman for Noble said he wasn't immediately able to comment.

 
   -By David Fickling, Dow Jones Newswires; +61 2 8272 4689; david.fickling@dowjones.com
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