The Brisbane-based mining group is believed to be seeking to raise $A400 million to leverage off its high stock valuation and make the acquisition, after a series of unsuccessful takeover bids and an upgrade of its resource base.

Macarthur was subject to considerable interest from Peabody Energy, New Hope and Noble Group before the introduction of the resources super-profits tax by then prime minister Kevin Rudd doused interest in the Australian mining sector.

It owns 72.48% of the Middlemount coal mine with Asian commodities trader Noble owning the remaining 27.52%.

The company, which is due to make its profit announcement today, dropped an agreed merger with local smaller rival Gloucester Coal in May.

In July Macarthur and its major shareholder CITIC Resources cancelled a $110 million deal over a coal joint venture because of resistance from minority shareholders.

The company had been seeking to acquire CITIC's 17% share in the Coppabella and Moorvale Joint Venture in exchange for 11.3 million Macarthur shares, however the deal fell through after some minority participants in the venture failed to waive their pre-emptive rights.

Whitehaven Coal may be the subject of takeover ambitions by Macarthur after the New South Wales miner confirmed earlier this month it had been in talks with potential suitors and reports that American coal giant Alpha Coal was interested in the company.

As reported in ILN last week, Australian small cap coal companies are trading at lower multiples than the larger producers such as Macarthur because of the recent upheaval over the proposed resources tax and uncertain global economic conditions.

“Of the large cap stocks, there are very few left with open registers. The top of the tree has been thinned out and is likely to be even thinner with the takeover underway by Banpu of Centennial,” a report by Patersons Securities noted.

“All of the top-listed producers – New Hope, Macarthur, Riversdale, Aquila, Whitehaven, Gloucester – have substantial strategic shareholders and/or JV offtakers.

“Increasingly, foreign strategic investors are taking stakes in earlier stage coal companies. Northern Energy, Bandanna Energy and Metrocoal have all recently sold shares or stakes in projects to Chinese or Korean investors.

“Some of the transactions reflect positively on nearby or similar projects in some of the smaller coal companies.”

Recent asset purchases or floats on the Australian Securities Exchange have been valued at an average of $3.10 per tonne of measured and indicated resources.

Many of these have been very early stage exploration assets and, in some cases, have no official resources.

This week Macarthur and Noble Group boosted the measured resources of their Middlemount project in Queensland’s Bowen Basin by 192% to 89.3 million tonnes.

The total resource increased 22% from last year to 122.6Mt, with the big shift in resources that were upgraded into the ideal measured category.

The upgrade resulted in a reduction of 6.3Mt in the indicated category, which is now set at 31.5Mt.

Inferred resources were reduced to a mere 1.8Mt, from 31.7Mt last year.

The Middlemount JV secured a long-term haulage contract with Pacific National last month, which will begin at the start of 2012 to support 3Mt per annum of production.

Macarthur plans to kick off stage 2 development of the mine in mid-2011.

Once complete, this ramp-up is expected to lift raw production capacity of the coking and PCI coal mine to 5.4Mtpa for the next 19 years.

Gloucester Coal has proposed a deal to acquire Noble’s stake in Middlemount, which will also reduce Noble’s stake in Gloucester to 61%.

Gloucester’s proposed acquisition of Noble’s share of Middlemount would ensure that two independent Australian companies have ownership of a first-grade coal asset at a time of growing rationalisation of the local industry, managing director Barry Tudor said.

The company will have direct input in the Middlemount management with joint owner Macarthur Coal once the $A269.5 million acquisition goes ahead, as there is a growing call from customers and shareholders to retain independent coal mining companies with long-term assets, Tudor told ILN.