Murray Energy, the US largest privately owned coal producer led by outspoken Donald Trump’s ally Robert Murray, has filed for chapter 11 protection, as the fossil fuel’s role in the country’s energy mix continues to weaken.
The Ohio-based miner, the eighth
coal company to go under over the past year, said it had reached a
restructuring agreement with lenders, noting it would finance operations with
available cash and a $350 million debtor-in-possession financing facility.
As part of the arrangement, lenders
are creating a new entity called Murray NewCo, which will acquire all assets
belonging to Murray Energy — one of the most powerful and well-connected
companies in the coal industry.
Robert Murray, the self-proclaimed
king of the coal industry, is stepping down from its chief executive position,
but he will remain as the company’s chairman. Former chief financial officer,
Robert Moore, is taking over, the company said.
“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,” Robert Murray said in the statement.
Unlike many of its peers, Murray
Energy was able to overcome the shrinking demand from utilities by focusing on
exports. However, those shipments have shrank because of declining global
prices.
US coal exports are estimated to
have dropped to 20.9 million tonnes in the third quarter, according to the country’s
Energy Information Administration (EIA). That represents a 28% fall compared to
the same period of 2018. The EIA expected coal exports to keep their downward
trend, slipping to 17.3 million by the end of 2020.
The company’s collapse is yet
another sign of a dying industry, despite Trump’s rescue attempts. Right after taking
office, he slashed environmental regulations and even installed a former coal
lobbyist to lead the EPA.
The deregulatory push, however, has
been unable to offset market forces. Coal just can’t compete with cheap natural
gas and the falling cost of solar power, wind and other forms of renewable
energy.
Internal demand for the fossil fuel
has hit a decades-low, with power plants expected to consume less coal next
year than at any point since President Jimmy Carter was in the White House,
according to government
forecasts released in early October.
Murray, who began working in coal
mines at 16 to support his family and went onto founding his own company in 1988,
has been an outspoken advocate of coal.
He challenged President Barack Obama’s clean-air rules and even called him the “greatest destroyer the US has ever had.”
In 2017, Murray filed a defamation lawsuit against John Oliver, HBO and CNN owner Time Warner (now called WarnerMedia), alleging “character assassination” during an episode of “Last Week Tonight.” That lawsuit was dismissed last year.
Murray has also been skeptic of climate
change, arguing that any threats have been exaggerated.