By John Durie

March 27, 2017 - The Australian Competition and Consumer Commission (ACCC) is poised next month to reject South32’s $200 million coking coal acquisition of Peabody’s Metropolitan Collieries based on its early statement of issues.

The move comes in the wake of today’s announced $655m share buyback by the BHP spin off.

The company has little debt and, with few acquisition possibilities apparent, today’s buyback would appear to be a welcome boost to shareholders.

But the stock is down 2.6 percent at $2.65 in lunchtime trade.

The coking coal deal would make it the sole supplier to BlueScope’s Port Kembla operation.

The deal also comes with an increased stake in the local port.

The ACCC said earlier it would test the market for alternate buyers.

The ACCC normally doesn’t intervene in resources deals given they are mainly aimed at the export market and have little impact on the local market.

But this one is different, with South 32 poised to become the only supplier of coal for the steel industry from the Illawarra market, with buyers including both BlueScope and Arrium in South Australia.