The US coal industry received another hammer blow today with the announcement America's second-largest coal mining firm, Arch Coal, has filed for bankruptcy.
The company said in a statement it has declared bankruptcy as part of a restructuring project to remove more than $4.5bn of debt from its balance sheet. The firm said it expected to be able to continue its mining activities and customer shipments throughout the restructure, and insisted it still has a future as a "large-scale, low-cost operator" operator.
"Today's announcement represents another significant step in our ongoing efforts to position the company for long-term success," said chief executive John Eaves. "After carefully evaluating our options, we determined that implementing these agreements through a court-supervised process represents the best way to solidify our financial position and strengthen our balance sheet. We are confident that this comprehensive financial restructuring will further enhance Arch's position as a large-scale, low-cost operator."
The firm has been on the brink of bankruptcy for a number of weeks, staving off Chapter 11 on December 17 after it negotiated a 30-day grace period on a $90m interest repayment due that day.
However, a combination of plummeting coal prices and increasingly stringent environmental regulations have forced it to become the fourth coal mining firm to declare bankruptcy in the past 12 months, joining Walter Energy, Alpha Natural Resources, and Patriot Coal.
It comes at the end of a tough fortnight for the global coal industry. New figures showed a sharp decline in the volume of coal imported by emerging superpower India, while last week China said it will close more than 1,000 coal mines in a bid to tackle the country's chronic air pollution.
Meanwhile, figures released late last week from the US Energy Information Administration revealed US coal production is now at its lowest level since 1986.
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