Major coal miner files for Chapter 11 bankruptcy

  • By Anya Litvak Pittsburgh Post-Gazette
  • Monday, August 3, 2015 3:03pm
  • Business

PITTSBURGH — In a move that has been rumored for weeks, Virginia-based coal miner Alpha Natural Resources Inc. filed for bankruptcy protection Monday citing an “unprecedented period of distress” for the centuries-old coal industry.

Alpha operates more than 50 underground and surface mines across four Appalachian states and Wyoming.

Under Chapter 11, Alpha said it will reorganize the company to better suit current energy markets. The move “will allow normal business operations to continue uninterrupted,” the company said in a statement, “with coal being mined, customer commitments honored, and wages and benefits for Alpha’s affiliated employees paid.”

Over the past two years, Alpha has laid off hundreds of mine workers and idled mines across its footprint.

At the same time, Alpha has dipped its toes into natural gas exploration, first with a joint venture with Rice Energy Inc. and, more recently, by first partnering with EDF Energy in a Marcellus Shale exploration program, then buying out its partner’s stake for $126 million before drilling had begun.

Natural gas is one of the main stressors on the coal industry, Alpha’s CEO Kevin Crutchfield said in a statement announcing the bankruptcy. Power plants, once loyal coal customers, are switching to cheaper natural gas, motivated by economics and increasing environmental regulations. At the same time, the oversupply in the coal market both domestically and abroad has pushed commodity prices into unsustainable lows and has been hurting the company’s value for several years.

On July 15, Alpha’s stock was delisted from the New York Stock Exchange, after a long period of trading below 50 cents per share. It was at 24 cents at the final trade.

Alpha’s is the latest in a string of large coal bankruptcies, including Patriot Coal, Walter Energy.

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