price behaviour, page-3

Looks like I was right for a change. Shorters were very busy yesterday trying to push it down with 2.11mm or 31% short sold and it wouldn't surprise me if they are still trying it on today.

IMO Peabody will not pull their offer based on what we know about them. We know they are keen to get their hands on MCC's coal having tried on their own last year and failed, they are so keen that they're happy to share it with Arcelor Mittal. These kinds of investments are not based on short term aims but longer term visions and they've obviously been planning this for a while.

I don't know much about Peabody but I do know that they are keen on Aussie mines with 5 mines in QLD and 4 in NSW with interests in both Met and Thermal coal and they are large as indicated by these statements from their website:-
"Peabody Energy (NYSE: BTU) is the world's largest private-sector coal company, with 2010 sales of 246 million tons and nearly $7 billion in revenues. Its coal products fuel 10 percent of all U.S. electricity generation and 2 percent of worldwide electricity"

"Peabody Energy has nearly 9 billion tons of reserves, manages or owns interests in 28 mining operations in the United States and Australia and has a minority ownership position in Venezuela's largest mine. We have access to the world's most rapidly growing markets for electricity, steel and Btu Conversion projects.

Peabody serves customers on five continents representing more than half the world's population. Peabody is the leader in clean coal solutions and is consistently recognized with the industry's highest honors for stewardship and sustainability"

"We are the only U.S.-based coal company with operations in Australia, the world's largest coal exporting nation"

"Peabody has positioned itself to participate in tremendous Pacific Rim growth by expanding its Australian operations and through offices in Mongolia, China, Indonesia and Singapore"

This statement from a recent presentation in May 2011 probably indicates the reason they want MCC:-
"Australia Expected to Supply Majority of Global Met Coal Increase"

So do I think they will pull their offer? No! But that's just my opinion in a crazy market.

ANZ