The future looks dark for coal miner Peabody. America’s biggest provider of the fossil fuel has admitted that it may have to seek bankruptcy protection.
Bloomberg reports that the company thinks it may not be able to continue to operate in its current form. The news is contained in a filing submitted to the US Securities and Exchange Commission. While it’s trying to turn its fortunes around, Peabody is not certain it will be successful. From the filing:
There can be no assurance that our plan to improve our operating performance and financial position will be successful. We may need to voluntarily seek protection under Chapter 11.
It’s not the only coal mining business to struggle: Bloomberg points out that competitors Alpha Natural Resources and Arch Coal have already filed for bankruptcy. Peabody has accumulated $US6.3 billion in debt to date and its plans to reduce that deficit by selling off mines has failed, with three sales falling through earlier this year.
There’s been a shift away from coal recently because of the falling price of natural gas — even China has promised to burn less of the stuff. Whether Peabody can weather the storm remains to be seen.
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