The largest coal miner in the US, Peabody Energy has filed for Chapter 11 bankruptcy, following rivals Alpha Natural Resources and Arch Coal. The company said it was taking the step to “strengthen liquidity and reduce debt amid an unprecedented industry downturn.”
The company filed for bankruptcy in the US Bankruptcy Court for the Eastern District of Missouri. Its Australian operations are not included in the filing.
“This was a difficult decision but it is the right path forward for Peabody,” said the company’s President and CEO, Glenn Kellow, in a press release. “We begin today to build a highly successful global leader for tomorrow.
Peabody’s bankruptcy filing comes after the company failed to complete the sale of its Colorado and New Mexico assets to Bowie Resource Partners. It had hoped the cash from the sale would keep it from the bankruptcy court.
The sale of the El Segundo, Lee Range and Twentymile mines fell through after Bowie failed to raise the required financing.
Despite the current industry woes, the company was positive about the future of coal in the US and globally, noting that there were multiple third-party projections that show a stabilising of US and global coal demand.
“A company like Peabody with safe, efficient operations, will be well positioned to serve coal demand that will continue in the US and around the world,” Kellow said.
The company also said that the bankruptcy process would not change its approach towards restoration of mining sites, aiming to allay fears that it would not be able to meet its reclamation obligations.
Peabody, along with its competitors, Arch Coal and Alpha Natural Resources, made multi-billion dollar debt-financed bets on metallurgical coal when prices for the steelmaking material were over US$300 per tonne. Since then, prices have collapsed and demand in China failed to live up to expectations, leaving the companies unable to service their huge debt piles.
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/13042016/peabody-files-for-bankruptcy-protection-2016-609/