One Of America's Oldest Coal Companies Just Filed For Bankruptcy
Facing declining demand and saddled with mounting debt, one of the oldest and largest coal companies in the United States has filed for bankruptcy protection.
Westmoreland Coal Co. announced Tuesday that it had filed a chapter 11 petition in the U.S. Bankruptcy Court in Houston and had entered into a restructuring agreement with a group of its lenders. The Colorado-based firm has $1.4 billion in debt, according to the bankruptcy filing.
Westmoreland is the fourth major American coal company to file for bankruptcy in the past three years, The Associated Press noted.
Alpha Natural Resources filed for bankruptcy in 2015; Peabody Energy Corp. and Arch Coal followed the year after. The three companies have since emerged from bankruptcy protection.
Westmoreland, which has a 164-year history and is the country’s sixth-largest coal mining company, has operations in several states, including Wyoming, Montana and New Mexico. The company, which employs nearly 3,000 people, said in a statement that it did not expect any staff reductions nor operations to be interrupted while it is in chapter 11.
“After months of thoughtful and productive conversations with our creditors, we have developed a plan that allows Westmoreland to operate as usual while positioning Westmoreland for long-term success,” the company’s interim CEO Michael Hutchinson said in a statement. “We will continue to … serve our customers in the normal course as we progress through an expedited process to restructure our long-term debt and other liabilities.”
Growing concerns about the impacts of coal-fired power plants on climate change, the growth of the renewable energy sector and competition from cheaper natural gas have depressed demand for coal in the United States in recent years.
In a declaration filed in bankruptcy court, Westmoreland’s chief restructuring officer Jeffrey Stein acknowledged that “coal mining businesses across the U.S. and around the world are feeling pressure as a result of a variety of macroeconomic factors, and the fate of many of these companies is yet to be determined,” according to The Wall Street Journal.
The Sierra Club said Tuesday, however, that Westmoreland’s bankruptcy was the “latest clear signal that the coal industry is in an irreversible decline.”
“With numerous coal companies facing bankruptcy in recent years, it is clear that further investments in coal are a mistake,” Mary Anne Hitt, senior director of the Sierra Club’s Beyond Coal campaign, said in a statement.
“The best course for Westmoreland Coal Company moving forward must be to ensure that there are adequate funds to clean up its mines and to treat its workers with the respect they deserve … Nothing can stop America’s shift away from coal and toward clean energy, but the transition should be managed to ensure workers are treated with respect and that vital environmental obligations are honored,” Hitt continued.
Published at Wed, 10 Oct 2018 10:40:17 +0000