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The New York Stock Exchange suspended trading on Cloud Peak Energy Tuesday because of the low shares of the Gillette coal company.
Cloud Peak Energy was warned in December that the stock market would pull the company off if the share price, which traded below $ 1 for 30 days, did not improve within six months. The company has chosen not to pay a recent payment of its debt, which, if it is not paid within 30 days, will put the company in default. The choice was noted as a potential precursor for a bankruptcy filing.
Cloud Peak was trading at just 16 cents a share on Tuesday.
An appeal to the company spokesperson for comments was not immediately returned.
Cloud Peak operates the Antelope and Cordero Rojo mines in Wyoming and the Spring Creek mine in Montana. It employs approximately 20% of full-time coal miners in the Powder River Basin, Wyoming.
Cloud Peak is becoming more volatile with higher costs and operational challenges. Its margins – the income remaining after deducting production costs – dropped from $ 2.30 per tonne in 2017 to 92 cents per tonne in 2018.
Production volumes at each of its mines also declined. Antelope near Wright, Wyoming's highest quality mine, reduced production by about 5 million short tons from 2017 to 2018, while the lower-quality one, Cordero Rojo, decreased by 4 million tonnes. short tons. The margins of Cloud Peak are probably somewhat improved by the tonnes exported from its Montana mines.
The company was the only publicly traded coal company operating in the Powder River Basin in Wyoming to avoid bankruptcy during the recent economic downturn. Cloud Peak entered the strong market for metallurgical coal before Asian demand assumptions collapsed. Although victim of the contraction of the thermal coal market in the domestic market as well as companies like Peabody Energy and Arch Coal, Cloud Peak has not faced bankruptcies or layoffs in Wyoming and has not not benefited from the considerable reduction of its debt.
Bankruptcy may be short-term for Cloud Peak. The company announced it hired advisors in November to consider options such as Chapter 11 sale and restructuring. It also took some cost-saving measures, such as reducing retiree health benefits and layoff of staff.
Follow reporter Heather Richards on Twitter @hroxaner
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