Zijin Mining to take 9.9% stake in Montage Gold
As part of the deal, the Lundin Family Trust also agreed increase its stake in the company from 17.7% to 19.9%.
Two of the once major US coal producers, Alpha Natural Resources and Arch Coal, expect to reach a deal with US EPA, the US Department of Interior and other related agencies and lenders that would cover its self-bonding obligations — bringing both beleaguered miners a step closer to reaching a bankruptcy exit deal.
Alpha, which filed for bankruptcy in August last year, is scheduled to ask a federal judge Thursday to approve its exit plan despite objections to it.
The bone of contention, reports Reuters, is the so called self-bonding program, which has allowed US coal producers to forego purchasing clean-up insurance on federal land by pledging to cover any such costs.
The Virginia-based company has lost $306 million so far this year as it navigates the bankruptcy process, court filings show.
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Arch Coal, which filed for bankruptcy protection in January after the company’s leverage levels were pushed beyond sustainable due to weak market conditions, has in turn suffered a blow of $337 million.
Alpha Natural Resources, Peabody Energy and Arch Coal have all gone bankrupt in the last 11 months, leaving behind about $3.6 billion in self-bonding liabilities.
The St. Louis-based company, which initially attempted to avert bankruptcy by launching an exchange offer but was ultimately blocked by senior lenders, has recently amended the terms of its exit plan.
As part of the modifications, senior management will surrender claim to $6 million in incentives to expedite the bankruptcy emergence plan, BidnessEtc reports.
Coal miners in the US have been hard hit by power plants substituting the fossil fuel with natural gas. The country’s coal production fell to 900 million short tons in 2015, according to data released in March by the US Energy Information Administration, a 10% decline on the previous year.
And for this year, the EIA is predicting that natural gas will overtake coal as the largest energy source in the US.
Between 2000 and 2008, coal was significantly less expensive than natural gas, and coal supplied about 50% of total US generation, but that will fall to less than a third in 2016, the EIA said.
Alpha, Peabody Energy and Arch Coal have all gone bankrupt in the last 11 months, leaving behind about $3.6 billion in self-bonding liabilities.
Comments
Restless Boomers
Self Bonding is putting the fox in charge of cleaning up the hen house after he’s had his fill. This is nothing short of corruption on the part of all parties involved in order to shift reclamation costs to taxpayers, as usual.