Robert Murray, the King of the Coal Industry and a Forceful Supporter of President Trump, is Fighting to Save his Mining Empire from Financial Collapse.
Murray Energy, America's Largest Private coal Miner, recently Failed to make Payments to Lenders. The Company entered into a Forbearance Agreement that Buys it time to Negotiate a Restructuring. That Grace Period is Scheduled to Expire after Oct. 17th, 2019.
The Cash Crunch at Murray Energy, one of the most Powerful and well-connected Companies in the Industry, underscores the Enormous Pressure facing the Coal Country. Countless Coal Companies have already Filed for Bankruptcy.
America's Top Energy Regulator agonizes over the Downfall of Coal Country. "It's a difficult time for anyone in the coal industry," said Phil Smith, Director of Communications and Governmental Affairs at the United Mine Workers of America. "The industry is in trouble. It has been in trouble for almost a decade now." "Coal is not back," said Smith.
Trump's Election in 2016 raised Hopes in the Coal Industry for a Revival. The President moved swiftly to Slash Environmental Regulations and even Installed a Former Coal Lobbyist to Lead the EPA. However, the Deregulatory Push is being Overwhelmed by Market Forces. Coal just can't Compete with Cheap Natural Gas and the Plunging Cost of Solar, Wind, and other Forms of Renewable Energy.
Power Companies are Ditching Coal in favor of Cleaner Alternatives at a Rapid Pace. U.S. Power Plants are expected to Consume Less Coal next year than at any point since President Jimmy Carter was in the White House, according to Government Forecasts released Tuesday.
Unlike many of its Peers, Murray Energy was able to Overcome the Shrinking Demand from Utilities by Focusing on Exports. However, those Shipments have Shrank because of Plunging Prices Overseas.
U.S. Coal Exports are Estimated to have Dropped to 20.9 Million Short Tons in the Third Quarter, according to the U.S. Energy Information Administration (EIA). That Represents a 28% Drop from the Same Period of 2018. The EIA expected Coal Exports to keep Falling, Slipping to 17.3 Million by the End of 2020. "International thermal coal prices have made exports unprofitable for most of 2019, leading to mine idling and deteriorating cash flows," S&P Global Ratings Analyst Vania Dimova wrote in a Report this week.
Murray Energy is under so much Pressure that it Failed to make Amortization and Interest Payments during a Grace Period that Ended on October 7th. That led S&P Global Ratings to Downgrade the Company's Credit Rating to "Default." In a Statement last week, Murray Energy said it Plans to use the Grace Period to Consider its Next Steps. The Company said it will Talk to Lenders about "various strategic options" aimed at Easing its Debt Burden, Improving its Liquidity, and Achieving a "more sustainable capital structure."
Murray Energy, the Ohio-based Company says it Produces about 76 Million Tons of Coal each year and Employs nearly 7,000 People across Six U.S. States as well as in Colombia. Mine Workers Stand to Lose in a Potential Bankruptcy, not just in Jobs but Potentially in the Erosion of Healthcare and Pension Benefits.
Murray Energy is the Last Major Company Contributing to the Pension Plan of the United Mine Workers of America, according to Smith. The Pension Plan's Depleted Funding will only get Worse if Murray Energy is Relieved of its Pension Requirements. "This is a crisis situation for us," said Smith, noting that the Average Pension is less than $600 per Month.
The Trump Administration has Rejected the Cry for Help because Officials determined there wasn't enough Evidence to Warrant the Use of Emergency Authority.
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