Wyoming coal giant Cloud Peak declares bankruptcy | Energy Journal

The company chose not to make a $ 1.8 million debt payment on March 15 and received additional extensions in April. A new deadline to pay his debt was set at 23:59. Friday. Instead, the coal company filed bankruptcy filings in a federal Delaware court a few hours before the deadline.

"Over the last few months, Cloud Peak Energy has carefully evaluated strategic alternatives to deal with challenging market conditions in our industry," said Cloud Peak President Colin Marshall. "We believe, for the moment, that a sales process outlined in Chapter 11 will provide the best opportunity to maximize the value of Cloud Peak Energy."

The company's deposit indicated that, at the end of the year, it had assets of nearly $ 929 million and total debts of nearly $ 635 million.

In its announcement, the company stated that its mining operations would continue normally during the bankruptcy process. The record, however, represents the latest episode on coal, which has been one of the main drivers of the state's economy, along with oil and natural gas.

Friday's announcement came just days after Governor Mark Gordon said he was optimistic about the future of coal. In a statement after the complaint was filed, the governor said that coal was an integral part of the country's and the world's energy portfolio and would remain so for years.

"It's a fact," Gordon said. "The proof is the overall energy structure of last year. I believe we need to find solutions that support coal energy and tackle climate change. This news about Cloud Peak reinforces the reason why I have so strongly advocated to innovate and advance the debate on coal energy beyond polarized political rhetoric. "

Cloud Peak owns three Powder River Basin mines: Antelope and Cordero Rojo in Wyoming and Spring Creek in Montana. The mines shipped 50 million tonnes of coal in 2018.

Cloud Peak is Wyoming's third largest coal producer and its mines account for 20% of the state's coal mines in the Powder River Basin.

After the filing of the complaint, speculation almost immediately began that Cloud Peak would sell its mines. The landowner group Powder River Resource Council has called on the state of Wyoming to "aggressively participate" in the bankruptcy proceedings.

"We are very concerned about the removal of pensions and health benefits for employees and retirees and the fact that millions of dollars of ad valorem taxes owed to Wyoming counties for the coal already produced will remain unpaid," said the vice-president. Chairman of the group, Bob LeResche. said in a statement. "Our greatest fear is that the recovery of Cloud Peak's large mines will cease and the financial assurances required by law will be inadequate."

Unlike other US coal giants, Peabody Energy and Arch Coal, Cloud Peak avoided the bankruptcies and layoffs that followed the slowdown in coal in 2015 and 2016.

Although these companies have struggled, Cloud Peak was known for making wise choices, focusing entirely on the Powder River Basin. When Peabody and Arch were facing bankruptcy in 2016, Cloud Peak made a profit in the second quarter.

But the company is under increasing financial pressure over the past year as its debts accumulate and profits per ton of coal fall. Coal demand has weakened and Cloud Peak has not benefited from the debt relief that Arch and Peabody have received when these companies are out of bankruptcy.

Last year, Cloud Peak began to show more signs of financial trouble: an announcement in June of the consolidation of its offices, a decision taken in October to reduce retiree benefits and a warning announced in December that he would be removed from the New York Stock Exchange.

Cloud Peak is the fourth largest coal producer in Wyoming, the first mining state to go bankrupt in recent years. Alpha Natural Resources, based in Bristol, Tenn., Filed for bankruptcy in 2015, followed by Peabody Energy and Arch Coal, two leading producing nations.

Inexpensive and less polluting natural gas and cheaper wind and solar energy have become attractive alternatives to coal in the United States. None of the huge open pit coal mines in the Powder River Basin had to close. But the outlook for thermal coal, the type used for power plants, is bleak.

A federal government report released Thursday predicts that coal in the coming months will account for 25 percent of US electricity generation, a decline of nearly half in the last decade. The trend continues despite President Donald Trump's efforts to move away from a wide range of environmental regulations affecting coal.

Wyoming officials have meanwhile sought to encourage carbon capture technology by funding research at a plant in the Gillette area. All marketable results of this work remain years of widespread use.

Associated Press contributed to this report.