Acquirer: Xstrata Coal Pty Ltd; Target: MIM Holdings Ltd, Mount Isa Mines Ltd

Summary

Xstrata acquiring (through one of its subsidiaries Xstrata Coal Investments Australian Limited) all of the issued ordinary shares of MIM.

Market definition

The Commission considered that the relevant markets for the purpose of this analaysis, taking into account the extent of overlap between the operations of the parties are: the national market for the supply of thermal coal; and
the national market for the supply of coking coal.

Competition analysis

The proposed acquisition would not appear to lead to a substantial lessening of competition in the relevant markets. This is because:

" The large volume of exports from domestic suppliers, indicates that Australian coal is priced at internationally competitive levels. Suppliers are likely to be able to divert supply from export markets to defeat a rise in domestic prices;

" The presence of well placed alternate suppliers;

" Barriers to entry do not appear to be high; and

" Countervailing power appears to be present among the customers of the Parties particularly in view of the presence of well informed customers and buying groups, which almost eliminating the opportunity of the merged party to raise prices or act independently of the market.

Merger type

Horizontal

Guidelines thresholds

Below

Imports above 10%

Yes

Initiation

Parties

ANZSIC code

1101