(Recasts with company confirmation, adds TerraCom comment)
MELBOURNE, March 30 (Reuters) - Australia's securities regulator searched the offices of coal miner TerraCom Ltd TER.AX with assistance from Queensland state police, as part of a probe into the inflation of coal quality for exports, the miner confirmed on Tuesday.
Australia is the world's biggest coal exporter and the probe has raised concerns that the practice of inflating the quality of thermal coal for export markets like Japan, South Korea and China may have been widespread.
The probe comes after the regulator confirmed it was investigating testing laboratory ALS ALQ.AX , whose internal review last year found that about half the certificates it provided for export coal samples over the past decade had been altered to improve the quality indicated. is among the biggest testers of coal. South Korean power provider Korea South-East Power KOSEP.UL banned ALS from certifying its coal tenders after the report became public last year. Company's Blair Athol Coal Mine in Queensland was attended by investigators from (ASIC) yesterday, and the Company provided them with information to assist with their inquiries," it said.
ALS's review did not name any counterparties, but was initiated following an unfair dismissal case brought against TerraCom alleging that the miner had worked with ALS to falsify export documentation. TerraCom bought the Blair Athol coal mine in 2017 from Rio Tinto (LON:RIO) RIO.AX
has denied the allegations that came out in the case.
Given the relatively short period of time that TerraCom has owned the Blair Athol mine, it would only account for around 1% of all cargoes tested across the investigation period, TerraCom said.
ASIC on Monday confirmed it had executed a warrant in relation to the investigation, without naming TerraCom.
Queensland Police, asked if TerraCom's Blair Athol operations had been searched, said ASIC was leading the matter and referred any questions to the regulator.
Last week, media reported that ASIC Commissioner Cathie Armour said during a Senate estimates hearing she was "very much aware" of allegations that laboratory ALS had inflated coal quality results on export certificates.
Armour offered no further information due to ASIC's policy of not commenting on matters under inquiry, according to a report by the Australian Associated Press.