Peabody Energy Corp, the world’s largest privately-owned coal producer, has filed for Chapter 11 bankruptcy protection in the US.
The move comes in the wake of a sharp fall in coal prices that left the company unable to service a recent debt-fueled expansion into Australia.
“Through this process, the company intends to reduce its overall debt level, lower fixed charges, improve operating cash flow and position the company for long-term success, while continuing to operate under the protection of the court process,” a statement issued by Peabody says.
“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.”
Australian operations would not be affected by the Chaper 11 procedings, Peabody’s statement says.
“No Australian entities are included in the filings, and Australian operations are continuing as usual.” Peabody said its Australian operations had in 2015 earned more than the prior year, despite falls in the price of coal.
Falling global coal demand, stricter environmental controls and a glut of natural gas have pushed big miners, including the second largest US coal producer, Arch Coal Inc, into bankruptcy protection over the past year.
“The factors affecting the global coal industry in recent years have been unprecedented,” Peabody acknowledged. ”Industry pressures in recent years include a dramatic drop in the price of metallurgical coal, weakness in the Chinese economy, overproduction of domestic shale gas and ongoing regulatory challenges.”