For more information call 01732 625 073

Menu
Friendly experts ready to help
Next day delivery
Trade accounts available
World’s largest coal producer files for bankruptcy protection

World’s largest coal producer files for bankruptcy pro...

Following a collapse in commodity prices, Peabody the world’s largest privately owned coal producer has filed for bankruptcy protection in the US.

This has been seen as a sign that the most carbon intensive fuel has been threatened by tightening environmental regulations.

Coal which is used to generate electricity is being increasingly replaced with alternatives such as wind and solar farms in some countries. Britain has promised to phase out coal use by 2025 however some countries like China and India continue to build new plants.  

Peabody filing to the UK bankruptcy court in Missouri seems to be due to a plunge in coal prices of up to 75% since the peak in 2011. This is one of the largest corporate failures in the wider commodity sector.

“This was a difficult decision, but it is the right path forward for Peabody” says the company’s chief executive Glenn Kellow. “This process enables us to strengthen liquidity and reduce debt, build upon the significant operational achievements we’ve made in recent years and lay the foundation for long-term stability and success in the future.”

It goes to show that companies like Peabody formed in 1883, now has 8,000 employees and customers in 25 countries. It was worth nearly $20bn a few years ago now have a much different future ahead of them.

“The outlook for coal players remains bleak,” says Sandra Chow, a credit-analyst base in Singapore, “Any recovery remains a long way from here.”

There was little sympathy from environmentalist who have long been antagonised by Peabody who had been misleading the public on climate change risks which they even told off by the New York stock exchange regulator for.

Peabody has always insisted it has been involved in positive climate change initiatives for the last two decades however Gregory Boyce, who stood down as Peabody’s chief executive last year said before he left that the biggest problem the world faced was unaffordable fuel. “The greatest problem we confront is not an environmental crisis predicted by flawed computer model but a human crisis that is fully within our power to solve.”

Richard Black director of the London-based Energy and Climate intelligence Unit (ECIU) said no one should underestimate the importance of mounting pressure by governments to curb all kinds of polluters.

Richard believes that the “environmental pressures are the biggest factor” affecting coal companies today. “In many countries, air pollution is now a major concern, governments are becoming more and more concerned about the climate impacts of coal and now the biggest private company of all has succumbed.”

 “Phasing out coal in favour of cleaner forms of energy, like natural gas or renewables, is a process which is accelerating around the world. US companies are going bankrupt, European countries including the UK are phasing it out, and our research also shows that talk of a coal renaissance in Asian countries is likely to be a red herring.”

Bill McKibben, co-founder of the green campaign group has strong views about Peabody in climate change debates, “This is a company that wilfully and deliberately sought to delay, dismantle or destruct climate action. Perhaps if they had spent more time and money diversifying their business rather than on lobbying against climate action and sowing the seeds of doubt about the science, they might not have joined the long, and ever growing, list of bankrupt global coal companies.”

Posted by:Ecolution Products Limited

© 2017 Ecolution Products Limited. Company number: 07422226

Registered address: Ecolution House Endeavour Park London Road Addington West Malling Kent ME19 5SH

Ecolution Products