Peabody Energy, the world’s largest coal company with flagship mines in Wyoming, filed for Chapter 11 bankruptcy today, nearly two weeks after terminating 235 jobs at its North Antelope Rochelle Mine in the northeast corner of the state.
“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,” the company stated in a release. “No Australian entities are included in the filings, and Australian operations are continuing as usual.”
Peabody (NYSE: BTU) accumulated more than $6 billion in debt after investments in metallurgic coal, which is used in steel production, fizzled with world demand for steel and a slowing China economy. U.S. demand for thermal coal remains weak amid flush natural gas supplies and continued low natural gas prices.
Wyoming coal producers Alpha Natural Resources and Arch Coal are also reorganizing under Chapter 11 bankruptcy, among some 50 coal company bankruptcies in recent years.
A recent citizens’ complaint alleges Peabody Energy is in violation of reclamation bonding required to assure its mines in the state are properly restored.
Director of the Sierra Club’s Beyond Coal Campaign Mary Anne Hitt noted that the Peabody Energy and Arch Coal spinoff Patriot Coal Corp. is an example of how the companies are determined to shed their liabilities and obligations, particularly to coal miners themselves.
“Unfortunately, Peabody has a history of spinning off responsibilities into smaller companies that seem built to fail,” wrote Hitt, “while taxpayers are left holding the bag. We need Congress to invest in economic redevelopment and diversification in coal communities, shore up health care and pension plans for coal workers and their families, and ensure toxic mining sites are cleaned up and reclaimed.”
Peabody said it’s filings in U.S. bankruptcy court will enable the company to continue “paying employee wages and providing healthcare and other benefits without interruption.
“This was a difficult decision, but it is the right path forward for Peabody,” Peabody president and CEO Glenn Kellow said in a release. “We begin today to build a highly successful global leader for tomorrow.”
Read the Peabody Energy letter to employees, April 13, 2016: