ST. LOUIS ( TheStreet) -- Peabody Energy ( BTU) submitted a proposal to acquire Macarthur Coal but the offer was rejected by the Australian coal company. Peabody's proposal is for 13 Australian dollars a share, for a total A$3.3 billion ($3 billion). Macarthur has 145 million tons of reserves of low-volatile PCI coal, and 1.3 billion tons of resources, Peabody noted in a press release. Macarthur has current production capacity of more than 5 million tons a year. Peabody said it believes there is a "strong strategic rationale for a combination of Macarthur's operating assets and project pipeline with Peabody's growing Australian platform of metallurgical and thermal coal production." For its bid to succeed, Peabody must get support from Macarthur's three major shareholders, China's Citic Resources, steelmaker ArcelorMittal ( MT) and steelmaker Posco ( PKX). The groups together own 47.3% of Macarthur, according to Reuters. Peabody said it remains open to discussing its proposal with Macarthur's board. It also said it has initiated discussions with Macarthur's three largest shareholders. Macarthur rejected Peabody's proposal saying the bid undervalued its growth prospects. -- Reported by Joseph Woelfel in New York. Follow TheStreet.com on Twitter and become a fan on Facebook.