January 11, 2016 (Cleveland)—In reaction to Arch Coal filing for bankruptcy, Tom Sanzillo, Director of Finance at the Institute for Energy Economics and Financial Analysis, stated:
“Like most of the coal industry, Arch’s outlook continues to be unrealistic. It cannot continue to operate zombie mines and chase the ghosts of past markets.”
The problem for Arch is not only debt reorganization but what kind of company Arch will be going forward. Currently, there are too many coal companies mining too much coal in a declining market where prices are too low to support operations. Given the absence of a plan to address operations including how many coal mines must close, future customers in the US and abroad, and a realistic assessment of coal prices, no bankruptcy plan should be approved.
The company continues to be over-weighted in Central Appalachian coal, unrealistic in its pursuit of exports off the west coast and out of touch with domestic competition from natural gas and renewables.”
Notes
Media contact: Karl Cates, [email protected] +1 917.439.8225
Director of Finance Tom Sanzillo has 30 years of experience in public and private finance, including as a first deputy comptroller of New York State, where he held oversight over a $156 billion pension fund and $200 billion in municipal bond programs.
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About IEEFA — The Institute for Energy Economics and Financial Analysis (IEEFA) conducts research and analyses on financial and economic issues related to energy and the environment. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy and to reduce.
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