Peabody Energy, the largest US coal miner, filed for bankruptcy Wednesday, battered like the rest of the industry by competition from cheap natural gas and a push for cleaner energy.
The long-expected filing for court protection under US Chapter 11 bankruptcy laws made Peabody just the latest and largest of dozens of US miners to go under as the fracking revolution made cleaner natural gas cheaper to use for steel plants and power generators.
Peabody lost $2.04 billion last year on $5.6 billion in revenues, as both coal prices and volumes shipped sank.
Unable to keep servicing a $6.3 billion debt load, Peabody said it took the step for court-protected restructuring “to strengthen liquidity and reduce debt amid an unprecedented industry downturn.”
“All of the company’s mines and offices are continuing to operate in the ordinary course of business and are expected to continue doing so for the duration of the process.”
It announced the move after arranging $800 million in new financing supported by some of its existing creditors to help tide it over through restructuring.
It also came after the company failed to sell off assets in New Mexico and Colorado.
The bankruptcy involves the company’s US operations, but not its Australian mines, where it said operations “are continuing as usual.”
“This was a difficult decision, but it is the right path forward for Peabody. We begin today to build a highly successful global leader for tomorrow,” Peabody president and chief executive Glenn Kellow said in a statement.