Houston — Birmingham Coal & Coke Co., an Alabama producer and subsidiary of CanAm Coal, filed for Chapter 11 bankruptcy on Wednesday, adding to the string of troubles for the Appalachian coal industry.
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Alberta, Canada-based CanAm said in a statement that during the financial restructuring, Birmingham "will operate its businesses, continue customer shipments, continue to honor its obligations to its landowners and will continue to pay its employees in the normal course."
Birmingham Coal & Coke operates the Gooden Creek, Old Union, Bear Creek and Knight surface thermal coal mines in Alabama. Combined, the mines produced 117,579 st in the first quarter of 2015 and 356,426 st in all of 2014, according to Mine Safety and Health Administration data.
"Over the past several years, the coal markets in the US have faced a number of significant challenges, including increased environmental regulations and reductions in demand due to weaknesses in the US and global economy and lower natural gas prices," CanAm CEO Jos De Smedt said. "This environment has created an extremely challenging financing environment as the company attempted to refinance its existing debt obligations.
"Additionally, weakness in the local thermal coal market in the fourth quarter of 2014 and the first quarter of 2015, combined with a cold and extremely wet winter that impacted the mining and shipment of coal, has continued to erode CanAm's cash position," he said.
In papers filed with the US Bankruptcy Court for the Northern District of Alabama, Birmingham states it has 50 to 99 creditors and lists the worth of its assets between $10 million and $50 million. The producer lists a total of $3.5 million owed to 13 unsecured creditors, with almost $3.1 million due to the Alabama State Lands Division.