Third-biggest US coal company files for bankruptcy
GILLETTE, Wyo. – The nation's third-largest coal company by production volume filed for bankruptcy Friday as utility companies increasingly turn to gas-fired generation and renewable energy for electricity.
Gillette-based Cloud Peak Energy filed for Chapter 11 reorganization in U.S. Bankruptcy Court in Delaware. The move was widely expected since at least March, when the company received the first of several extensions to make a $1.8 million loan payment. The latest extension expired Friday.
Cloud Peak owns and operates three mines in the Powder River Basin: the Antelope and Cordero Rojo mines in Wyoming and the Spring Creek Mine in Montana.
The mines shipped 50 million tons of coal in 2018. They will remain in operation during the bankruptcy process with help from $35 million in debtor-in-possession financing, according to the company.
"While we undertake this process, Cloud Peak Energy remains a reliable source of high-quality coal for customers," President and CEO Colin Marshall said in a release.
Cloud Peak is the fourth major coal producer in Wyoming, the top coal-mining state, to file for bankruptcy in recent years. Bristol, Tennessee-based Alpha Natural Resources filed for bankruptcy in 2015, followed by top-producing Peabody Energy and Arch Coal in 2016. Westmoreland Coal filed for bankruptcy in October.
Inexpensive and cleaner-burning natural gas, and increasingly inexpensive wind and solar power, have become attractive alternatives to coal power in the U.S. None of the Powder River Basin's huge, open-pit coal mines has had to close. But the outlook for thermal coal, the type used to fire power plants, has been bleak.
A federal government report released Thursday predicts coal in the months ahead will account for 25 percent of U.S. power generation, down by about half over the past decade. The trend continues despite President Donald Trump's efforts to back away from a wide range of environmental regulations affecting coal.
Wyoming officials have meanwhile sought to encourage carbon-capture technology by funding research at a Gillette-area power plant. Any marketable results from that work remain years away from wide-scale use.
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