Gold price nears two-month low on post-Trump win dollar boost
Gold has now declined more than 5% since last week’s election.
Lighthouse Resources Inc., a coal company with mines in Wyoming and Montana, and White Stallion Energy LLC, a miner that operates in Indiana and Illinois, both filed for bankruptcy after the Covid-19 pandemic dropped coal prices.
Coal companies have struggled amid an increase in natural gas and renewable energy, and U.S. coal production in the second quarter of this year was the lowest it has been in almost 50 years, according to bankruptcy court filings.
Coal has been hit hard this year because of the decrease in demand for electricity to run offices, factories and stores. That’s been true all over the world, and in the U.S., coal power plants have been the first place that utilities have cut back when they need less electricity.
Peabody Energy Corp., the biggest U.S. coal producer, warned last month that it’s facing the same issues and that it may seek bankruptcy protection for the second time in five years if the market doesn’t improve.
Lighthouse has debt of about $456 million, according to its declaration. White Stallion, which is majority owned by American Patriot Energy LLC, listed about $104 million of debt, according to its declaration.
“In light of the challenging market conditions and other impacts on our business from Covid-19, we have been required to reduce costs and reorganize our business resulting in the reduction of our workforce in Montana,” Lighthouse Chief Executive Officer Everett King said in a news release.
Lighthouse’s bankruptcy was prompted by decreased prices in Asia connected to the Covid-19 global pandemic and the fact that the cost to produce coal from its Decker Mine in Montana exceeds the sale price in its contract with an electric company.
“Continuing to operate the Decker Mine is not economically feasible,” states a declaration filed by Darin T. Adlard, Lighthouse’s vice president of finance and accounting.
White Stallion suffered a net loss of about $30 million in 2019. In the months before its bankruptcy its financial situation worsened due to the decline in coal consumption at power generation facilities caused by the economic slowdown resulting from Covid-19, according to the bankruptcy declaration. The company expects that all its mines will remain idled during the bankruptcy process.
(By Josh Saul and Will Wade)
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