Anglo American, Citic May Team Up For Macarthur Coal

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Anglo American, the British mining giant, and China's Citic are reportedly considering teaming up to make a bid for Australia's Macarthur Coal, the coal company, prized by Peabody Energy, the largest U.S. coal company. Rumors of Anglo American's interest in Macarthur started last week and have since gained steam.

Missouri-based Peabody (BTU) and ArcelorMittal (MT), the world's largest steelmaker, teamed up to offer $4.7 billion for Macarthur, the world's largest maker of pulverized coal. This is Peabody's second run at Macarthur after being rebuffed last year.

Citic, which is Macarthur's biggest shareholder with a 24% stake, was previously believed to be mulling an offer for Macarthur, but no bid has materialized as of yet. Anglo American has been tied to many mining deals over the years, but the company never finds its way to ultimately being part of the sector's biggest takeovers.

The purchase of Macarthur would be the largest deal to date for Anglo American, but even by teaming up with Citic, the move would face hurdles because ArcelorMittal owns 16% of Macarthur. Rio Tinto (RIO) and Yanzhou Coal (YZC), China's fourth-largest coal company, have also been rumored to be interested in Macarthur.