January 29, 2016 Read More →

‘Zombie’ and ‘Ghosts’: CEO Concedes Coal Downturn Is More Than ‘Cyclical’

Taylor Kuykendall for SNL:

Murray Energy Corp. CEO Robert Murray told attendees of Coaltrans USA that the nation’s “zombie mines” should go away and should not enjoy the ability to shed debt in bankruptcy and return to competition free of its burdens and further pressuring solvent producers.

Murray said he wanted to take a break from the usual talk about the “cyclical” factors that affect coal demand and instead focus on “The Ongoing Destruction of America’s Coal Industry.” Murray referred to recent coal bankruptcies as “dominos in the entire coal industry collapse.”

“Every bankruptcy depresses the value of the debts of all coal producers, including those who are financially surviving, and pushes them downward toward economic default,” Murray said in prepared remarks. “Most especially, the bankruptcy lowers the coal prices that we must compete with in the marketplace. This is because in the coal company bankruptcies, the courts relieve the petitioner of its obligations for employee costs wage agreements, if there is one, debt, and long-term employee-related and some reclamation liabilities.”

Murray said the new streamlined, lower cost coal producers are relieved of their obligations to employees, lenders, shareholders and others. In the meantime, he said, they rarely close a mine because of the expense to do so.

“This production should go away. But these companies emerging from bankruptcies operate what are now called ‘zombie mines’ as they chase the ghosts of past coal markets,” Murray said. “Thus production does not decline, prices are depressed and every coal company is dangerously threatened or pulled into this downward financial spiral.”

Murray says ‘zombies’ of bankruptcy should stop ‘chasing ghosts’ of coal markets

3 Comments on "‘Zombie’ and ‘Ghosts’: CEO Concedes Coal Downturn Is More Than ‘Cyclical’"

Trackback | Comments RSS Feed