Foresight Energy became on Tuesday the latest coal miner to file for bankruptcy, saying the global economic slowdown triggered by the coronavirus epidemic had pushed it over the edge.
The company, already hit by an ongoing switch to cheaper and cleaner sources of energy, said it planned to hand ownership to its creditors as part of a restructuring plan.
The restructuring plan, which allows the company to stay in business, would cut debt by about $1 billion by swapping $1.4 billion of debt for equity, according to the Chapter 11 documents filed in US Bankruptcy Court in St. Louis.
The strategy, chief executive Robert D. Moore said, leaves Foresight with just $225 million.
The coal miner’s collapse is yet another sign of a dying industry, despite President Donald Trump’s rescue attempts. Right after taking office, he slashed environmental regulations and even installed former coal lobbyist Scott Pruitt at the head of the Environmental Protection Agency (EPA). Pruitt resigned in 2018, facing numerous ethics investigations.
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.
Jobs in the sector continue to shrink. While there are over 129 million people employed by businesses in the US, there are only about 50,000 coal miners, or 0.04% of the country’s total number of people working, employed by the industry.
The latest jobs report, published last week, shows that there are fewer people employed by the coal sector now (50,600 as of February) than three years ago (50,900 in January 2017). This compares to over 6.4 million jobs being added in the past three years.
Internal demand for the fossil fuel, in turn, has hit a decades-low point 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 official forecasts. At the same time, financial institutions are restricting thermal coal funding.
To date, over 100 global banks and insurers, including Goldman Sachs and JPMorgan Chase, have announced their divestment from coal mining and/or coal-fired power plants.