Arch Coal, the United States' second largest coal supplier, on Monday filed for bankruptcy, signaling what environmentalists described as the "end of an era" as the country moves to more renewable, less polluting energy sources.
Bloomberg reports: "The court filing listed $5.8 billion in assets and $6.5 billion in debt. The company has agreed to the terms of a $275 million loan to keep it operating during bankruptcy. The loan includes a $75 million carve-out for environmental reclamation obligations, according to court papers."
The announcement, which comes after five years of decline in Arch's stock price, marks the latest coal industry titan to fall as the global energy market is beginning to catch up with more climate-friendly regulations and demand.
Indeed, in a filing accompanying the Chapter 11 petition, Arch chief financial officer John Drexler took aim at the U.S. Environmental Protection Agency's emissions regulations, writing: "Over the past several years, a confluence of economic challenges and regulatory hurdles has hobbled the coal industry."
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A recent report by the London-based Carbon Tracker Initiative found that the slump in coal prices has forced more than two dozen U.S. coal companies into bankruptcy over the past three years.
"With one-third of the nation’s coal plants slated for retirement, due to grassroots advocacy and increased competition from renewable energy, the coal industry’s prospects are fading," Hitt continued. "The bankruptcy of America’s second largest coal company, which comes on the heels of an historic, universal climate agreement in Paris, is a clear signal that coal is a fuel of the past, and that America’s future will be powered by clean energy that doesn’t harm public health or our climate."
The company, which is based in Creve Coeur, Missouri, maintains holdings across the U.S., including in Appalachia and Wyoming's Powder River Basin, where Arch's Black Thunder mine, the country's second largest, is located.
The Sierra Club said the filing "significantly reduces the likelihood that several Arch Coal projects across Montana and Washington State will move forward, including the Otter Creek mine and Tongue River Railroad in Montana, as well as the proposed Millennium Bulk Terminals coal export terminal in Longview, Washington."
Ross Macfarlane, senior advisor with the Seattle-based Climate Solutions, celebrated this development, saying: "Arch’s bankruptcy is the final nail in the coffin for the Millennium coal terminal in Longview, Washington, as well as the company’s fading dreams to make itself into a major player exporting Montana coal to Asian markets."