Gold holds steady before results of coin-toss US election
Bullion was near $2,743 an ounce in early Asian trading as the battle for the White House reached its endgame.
Murray Energy, the US largest privately owned coal producer led by outspoken Donald Trump ally Robert Murray, has filed for chapter 11 protection, as the fossil fuel’s role in the country’s energy mix continues to diminish.
The Ohio-based miner, the eighth coal company to go under over the past year, said it had reached a restructuring agreement with lenders to restructure more than $2.7 billion of debt.
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.
The deal reached with lenders provides Murray Energy with a new $350 million loan that it will use to keep up operations
The coal producer noted it would finance operations with available cash and a $350 million debtor-in-possession financing facility.
Robert Murray, the self-proclaimed king of the coal industry, is stepping down from the 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 shrunk 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 in 2018.
The EIA expects coal exports to stay on a downward trend, slipping to 17.3 million by the end of 2020.
“[The bankruptcy announcement] makes clear that the coal mining industry has no cards left to play,” said Mary Anne Hitt, senior director of Sierra Club’s Beyond Coal campaign.
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 government forecasts released in early October.
As this transition to renewables continues, Hitt noted, state and federal lawmakers should take action to protect the miners and communities that have long shouldered the industry’s burdens. She said that should be done by “supporting pensions and investing in a more diverse and robust economy, not bailing out political donors.”
Murray Energy’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 former coal lobbyist Scott Pruitt at the head of the Environmental Protection Agency (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.
Under the restructuring deal, former CFO Robert Moore, will become president and chief executive of the newly-formed Murray NewCo
Murray, who began working in coal mines at 16 to support his family and founded 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 a skeptic of climate change, arguing that any threats have been exaggerated.
Comments
Balter
Wouldn’t say it’s a dying industry but I do recall someone saying “trade wars are easy” as the orchestra gently sawed out Nearer My God To Thee…