By Timothy Cama - 01/11/16 10:29 AM EST
Arch Coal Inc., the nation’s second-largest coal mining company, filed for bankruptcy Monday.
The filing is just the latest in a string of major coal company bankruptcies in recent years as the industry has been battered by a large-scale switch in electricity production away from coal.
Fueled by cost considerations and environmental regulations, electric utilities are in the middle of a transformation toward natural gas and renewables, and are closing or reducing the use of coal-fired power plants.
Last April saw the first time in United States history during which natural gas’s market share for electricity exceed that of coal for a month, according to the Energy Information Administration (EIA). Gas beat coal again for at least four more months last year, EIA said.
Arch cited weakening demand for coal in filing for Chapter 11 bankruptcy, saying its existing mines and miners will not immediately be affected by the process of restructuring its debt.
“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,” Arch Coal Chairman John Eaves said in a statement.
The company said it reached agreements with lenders to reduce its debt by about $4.5 billion.
It reported $6.5 billion in debt and $5.8 billion in assets in its filings.