Arch Coal files for Chapter 11 bankruptcy protection

In a company-issued press release, Arch framed the bankruptcy in a positive light, arguing that financial restructuring would better position the company for long-term success.

Arch Coal filed for bankruptcy and reached an agreement with a majority of its lenders to restructure its debt, the company said in a statement Monday.

Arch Coal, the second largest mining company in the U.S., filed for bankruptcy on Monday. High pension costs and the threat of stricter environmental regulation have compounded the coal miners’ woes.

“Since the market downturn, we have taken many steps to enhance the efficiency of our operations and to strengthen our asset base”, said John W. Eaves, Arch’s Chairman and CEO. Overall, 23 percent of the generating units are expected to retire or convert by 2025, Arch said. Though the purchase came at the peak of coal prices, a subsequent drop in demand from China, competition from Australian exports and cheap gas has left Arch hemorrhaging money ever since, according to Bloomberg.

Arch Coal is the latest in the coal industry to declare bankruptcy.

Arch was Utah’s largest coal-mine operator until the summer of 2013, when it sold Canyon Fuel Co. and its Sufco, Dugout Canyon and Skyline mines to Bowie Resources for $435 million. St. Louis-based Arch Coal has filed for bankruptcy. But the filing doesn’t explain how that $75 million might be divided among the company’s obligations in various mining states. Its filing means producers of 25 percent of America’s coal are now in bankruptcy. Federal law requires coal companies to guarantee that, in the event that the company goes under, mines will be cleaned up – these are known as “reclamation bonds” and are required by federal law for any mining permit.

President Barack Obama’s clean power plan is curbing the use of coal for power generation domestically.

Cheyenne, Wyo. • The beginning of bankruptcy proceedings for the nation’s second-biggest coal company cast another dark cloud over the economy of Wyoming and other states in the top coal-producing region. GSO Special Situations Master Fund, a Blackstone Group affiliate, even filed a lawsuit seeking to clear the way for a debt exchange.

A train hauling coal from an Arch Coal Inc. mine heads north out of downtown Seattle.