MURRAY Energy, the largest private coal miner in the US, has filed for bankruptcy as utilities continue to choose natural gas and renewable power over coal.
Murray Energy is the largest privately-owned coal miner in the US and currently has 13 active coal mines. It was founded in 1988 by Robert Murray, who is a strong supporter of US President Donald Trump and presented the administration with a “wish list” of environmental regulations he wanted removing, according to Reuters. This included lobbying for mercury regulations to be rolled back. Despite the Trump administration’s attempts to prop up the coal industry, such as repealing the Obama-era Clean Power Plan, the coal market has been declining.
Murray Energy is the eighth coal producer to file for bankruptcy this year. It has agreed a deal with a group of lenders for US$350m to remain operational throughout the bankruptcy process. This includes restructuring, which has made Robert Moore, CEO of Foresight Energy, the President and CEO of Murray Energy. Foresight, an affiliate of Murray Energy, was not part of the bankruptcy filing. Murray will become chairman of the company.
“Although a bankruptcy filing is not an easy decision, it became necessary to access liquidity and best position Murray Energy and its affiliates for the future of our employees and customers and our long-term success,” said Murray.
In the bankruptcy declaration, Moore said that coal markets have deteriorated significantly, driven by the closure of coal-fired plants, the record production of inexpensive natural gas, and the growth of wind and solar energy.
Moore said that while Murray Energy has previously been “able to navigate the challenges of the coal marketplace”, around 19 GW of coal capacity has been retired since 2013, which is a reduction of 27% compared to the 2013 baseline. In the same period, gas has increased by 30% and renewables by over 50%.
Moore wrote that Murray Energy is still well positioned to be a leading operator in the coal industry. “Murray maintains its belief that longer-term demand for coal is underpinned in the United States by a practical requirement that approximately 25% of the power supplied to the electrical grid come from coal power generation to ensure reliable electricity during cold snaps and heat waves, when other parts of the grid will be less reliable or overly expensive. Murray is well-positioned to take advantage of the industry’s need for a minimum proportion of the installed power grid capacity, given its coal reserves located in strategically-optimal mining regions near coal-fired power plants.”
Catch up on the latest news, views and jobs from The Chemical Engineer. Below are the four latest issues. View a wider selection of the archive from within the Magazine section of this site.