The second largest coal mining and processing company in the US has filed for bankruptcy.
Arch Coal, which has been affected by the weakening demand for coal and stringent environmental regulations, said it has reached an agreement with a majority of the lenders to erase $4.5 billion (£3bn) in debt from its balance sheet.
It expects its mining operations and customer shipments “to continue uninterrupted” through the reorganisation process.
The company is one of the major coal producers for the global steel and power generation industries, serving customers on five continents.
It is said to control more than five billion tons of coal reserves.
John W. Eaves, Arch’s chairman and CEO said: “After carefully evaluating our options, we determined that implementing these agreements through a court-supervised process represents the best way to solidify our financial position and strengthen our balance sheet. We are confident that this comprehensive financial restructuring will further enhance Arch’s position as a large-scale, low-cost operator.”
Latest figures from the US Energy Information Administration (EIA) revealed coal production in the country has fallen to the lowest levels since 1986.