Prime Minister Julia Gillard has hailed a takeover bid for a Queensland coal mine as proof her carbon price package won't kill off the sector.
US energy giant Peabody Energy Corp is making a second tilt for Macarthur Coal within 14 months, this time through a $5 billion bid in tandem with the world's largest steel maker, ArcelorMittal.
The joint bid came a day after the federal government unveiled the details of its controversial carbon tax, which will be levied on all big carbon emitters including the coal and steel industries.
Assistance in the early years of the carbon pricing scheme will offset the impact of tax.
Ms Gillard said news of the deal would dent the credibility of scaremongering over her carbon tax.
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"We are seeing the biggest takeover bid in Australian history for a coal company," she told ABC Radio on Tuesday.
"You couldn't get a better indication that business people see a good future in coal mining in this country."
Australia would continue to see employment in coal mining grow, Ms Gillard said.
"You have to track where the money is going ... it's going into buying an Australian mining business.
"People would only do that if they thought it had a great future."
Climate Change Minister Greg Combet is also talking up the industry's future, disputing a claim by the Australian Coal Association that the carbon tax package would wipe out 4700 jobs.
"A couple of years ago it was 9000, only last week it was 3000, now it's 4700, they're just plucking numbers out of the air with no credibility at all," he told ABC Radio.
A $1.3 billion assistance package for the industry would ensure no job losses.
Mr Combet said the Peabody bid for Macarthur Coal was an endorsement of the Gillard government's climate change policy.
He said he didn't think there would be mine closures as a result of the carbon tax.
Treasurer Wayne Swan says the bid shows there was "very strong investment and faith" in the coal sector.
"What this proves is that Tony Abbott's Chicken Little routine is simply hollow," he told ABC Radio of the opposition leader's predictions of mine closures and job losses.
