One of the largest US producers of thermal coal for power stations, has filed for bankruptcy protection ” the first big casualty among the country’s coal miners of power generators’ shift to natural gas.
Patriot Coal‘s move, made after the close of New York trading, follows sharp falls in coal demand following the ramping up of production from abundant US shale gas reserves.
The company said that besides the switch to natural gas for power generation, it had been hit by tougher environmental regulations and weak US and international economies.
“During recent months, the cancellation of customer contracts, lower thermal coal prices and rising expenditures for environmental and other liabilities have severely constrained the company’s liquidity and financial flexibility,” it said.
A consortium of banks led by Citigroup, Barclays and Bank of America Merrill Lynch had committed $802m in continuing financing for the company during its reorganisation under Chapter 11 protection.
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