Dow Jones Newswires quoted CFMEU general president Tony Maher as saying “unless the company reverts to its previous course of respecting workers rights and agreements, it will face a concerted industrial, corporate, legal and international campaign."

Xstrata is in talks with Queensland-based miner MIM Holdings on a possible $3 billion takeover.

If Xstrata launch a bid for MIM, the CFMEU is expected to put pressure on Queensland state's Labour government to oppose the merger. The Queensland government would need the support of the Liberal-National federal government to block the move and this is probably unlikely.

Queensland's oremier, Peter Beattie, told Dow Jones Newswires he was keen for MIM to remain a Queensland company and he would be watching the Xstrata talks closely.

The CFMEU's Maher said Xstrata is the fastest growing coal company in Australia, and if it acquires MIM would become the country's third largest coal producer behind BHP Billiton and Rio Tinto.