US Coal Industry in Trouble
World Economy

US Coal Industry in Trouble

The bad financial news for coal export prospects in Washington, Oregon and British Colombia has come almost too quickly to track.
Arch Coal’s debt restructuring has failed and bankruptcy looms. Arch Coal, one of the two companies trying to develop the Millennium Bulk Logistics coal terminal in Longview, WA, has been in deep financial trouble for a while. They wildly overpaid for coal mines at the peak of the coal bubble. But their bonds are coming due soon, and the company doesn’t have the money to pay them back, Desmogblog reported.
So Arch tried to entice bondholders to agree to let Arch pay them less, and pay later; bondholders balked, and blocked the deal. So now the nation’s number two coal company is close to bankruptcy and effectively cut off from credit markets.
Mine cleanup has emerged as a major issue. Federal law requires coal miners to clean up after themselves, but their growing financial challenges are raising the specter that they may not have the money for cleanup.
Canadian coal giant, Teck Coal, admitted that its mines are worth $1.5 billion less than they thought. Teck Coal, which operates in BC and Alberta, and exports through Westshore andRidley, posted a massive $2.1 billion loss, after writing down the value of its coal mining assets by $1.5 billion.
In the same vein, Peabody coal took a $900 million asset impairment charge back in June, focused on their Australian mines.

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