Washington (AFP) - 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 the global push for cleaner energy.
The long-expected move 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 at the same time that demand from China's huge coal-dependent industrial sector began to fall.
St. Louis, Missouri-based Peabody lost $2.04 billion last year on $5.6 billion in revenues, as both coal prices and volumes shipped to customers in 26 countries sank.
Unable to keep servicing a $6.3 billion debt load, Peabody said it took the step for court-protected restructuring under US Chapter 11 bankruptcy laws "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 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.
Trade in Peabody shares was halted after they ended at $2.07 Tuesday, down 75 percent since the beginning of the year. The shares were trading above $75 a year ago.
- 'Unable to change' -
Peabody has been hurt by both the plunge in oil and natural gas prices -- a direct consequence of the fracking revolution in the United States that unleashed huge new supplies -- and the economic slowdown in China, the world's leading coal consumer, where half the steel industry has been idled.
US coal production has fallen more than 20 percent since 2010 and is expected to sink further this year, according to the US Energy Information Agency. Meanwhile natural gas output has jumped more than 20 percent while gas prices have plunged by half.
Facing the same challenges, about two dozen US coal companies have sought bankruptcy protection or closed in the past three years.
The number-two company, Arch Coal, also based in St. Louis, filed for bankruptcy in January, unable to service its $4.5 billion in debt.
"Be in no doubt; this is very big news," said Richard Black, director of the Energy and Climate Intelligence Unit.
"Phasing out coal in favor of cleaner forms of energy, like natural gas or renewables, is a process which is accelerating around the world."
"The company was unable to change with the time... as the world was shifting towards renewable energy," added Lindsay Meinan of the climate-change group 350.org.
The goal of reviving Peabody's operations after bankruptcy reorganization is meanwhile setting up a battle with environmental groups aiming to push the energy industry and the banks that finance it toward clean energy.
Ben Collins, a campaigner with the Rainforest Action Network, said the bankrupt coal companies and their creditors are in a number of cases trying to reduce their pension and health-care obligations for current and retired workers.
In addition, he said, they are trying to cut their obligations to fund mine cleanup and reclamation.
"We have seen in recent bankruptcies... the companies walking away from promises to pensions and to clean up mines," he said.
He criticized Citigroup for arranging new financing for Peabody despite having pledged last year to begin cutting its support for the coal sector.