World's largest coal company files for bankruptcy
(MENAFN - The Journal Of Turkish Weekly) >The world’s largest coal company filed for Chapter 11 bankruptcy protection Wednesday citing a prolonged industry downturn and costly government regulations.
The bankruptcy filing by Peabody Energy included the majority of the company’s entities in the United States. Headquartered in St. Louis Peabody also operates large operations in China Australia Germany the U.K. Indonesia India and Singapore.
With total assets including a wagon and two mules Peabody was founded in Chicago in 1880.
As the market for coal exploded during the next century the firm swelled into a massive international operation supplying coal to 26 countries and earning a market capitalization of $20 billion at its peak in 2008.
But stricter environmental regulations the rise of fracking and a disastrous drop in the demand for coal especially in China caused Peabody to implode. “The factors affecting the global coal industry in recent years have been unprecedented” the company noted in its filing.
With many coal-fired power plants going out of business U.S. coal production has dipped from 1.17 billion metric tons in 2008 to just 752.5 million this year.
Peabody has laid off 20 percent of its global workforce over the past three years but is still burdened by $10.1 billion in debt the firm announced.
"This was a difficult decision but it is the right path forward for Peabody” chief executive Glenn Kellow said in a statement. “Through today's action we will seek an in-court solution to Peabody's substantial debt burden amid a historically challenged industry backdrop.”
In recent years Peabody’s record for environmental sustainability has been roundly criticized.
In scoring the largest U.S. companies for environmental impact in 2012 magazine Newsweek ranked Peabody 493 out of 500.
“As coal’s impact on our climate and communities became more clear Peabody executives seemed to think that a misleading public relations campaign could somehow keep the world blindly addicted to coal” Kelly Mitchell energy campaign director for the environmental group Greenpeace USA said regarding the filing.
“Like its effort to deny climate change Peabody’s denial of the risks facing the coal industry fooled no one.”
By Barry Eitel
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