Problems that had dogged the coal industry in recent years came to a head in St. Louis over the first few months of 2016 as two coal companies filed for bankruptcy and a third narrowly avoided the fate. But as the year drew to a close, a mining rally that started this year and analysts project will extend into next year provided some cause for optimism across the industry.
Arch Coal, which had been losing money since 2012, filed for bankruptcy on Jan. 11, saying it had agreements in place to eliminate more than $4.5 billion of debt from its balance sheets. The country’s second-biggest thermal coal miner emerged from Chapter 11 protection on Oct. 5 and has seen its shares increase 24 percent since, The Street reports.
The Year in Brief offers a look at the business stories that were most important to Missouri in 2016, and that will continue to shape the state in 2017 and beyond.
Peabody Energy filed for bankruptcy on April 13, listing $10.1 billion in debt. However, by late November, Peabody was moving closer to exiting bankruptcy as surging coal prices helped defuse disagreements among the company’s creditors. In December, Peabody’s cash position was such that the company sought permission to repay a $500 million loan early.
These coal companies’ debt issues notwithstanding, 2016 marked a turnaround for the mining industry. After commodity prices hit quarter-century lows early in the year, a rally ensued. Analysts expect that to last into 2017, Bloomberg reports, but longer-term prospects remain uncertain, complicated by factors including President-elect Donald Trump’s policies, Chinese infrastructure spending and natural gas prices.