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More coal companies filing for Chapter 11

BECKLEY, W.Va. — Hardship is nothing new to the hard-scrabbled coal industry; it’s always been a boom-or-bust business. But the industry’s recent tale of woe and financial misery is unprecedented, so much so that a number of companies are either in bankruptcy protection or on the cusp.

Within the last month, at least three coal companies with mine operations in southern West Virginia have sought Chapter 11 protection, and the once financially muscular Alpha Natural Resources is expected to file bankruptcy as early as this week.

 Last week energy companies held second-quarter financial conference calls with analysts and reporters. Yes, there was a good bit of spin and answer avoidance on issues such as stock prices, but everyone hung up knowing the industry is in crisis. Coal companies are seeing their stocks — fictitious capital, in some cases, — worth bargain basement prices; a few are now nothing more, literally, than penny stocks.

Well into an era of weak demand that led to multi-year lows, the industry is now being clobbered by new costly environmental regulations. That one-two blow has led the industry to its present financial fiasco. According to SNL Financial, the combined market capitalization of the entire publicly listed coal companies was less than $9.30 billion last month. The coal sector’s market cap — total market dollar value of all outstanding shares — is down more than 80 percent from four years ago.

And that financial fiasco has led a number of companies to file for bankruptcy protection while they restructure their spread sheets.

Things aren’t expected to improve anytime this year…


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