Peabody Energy files for bankruptcy

The world’s largest coal miner Peabody Energy has filed for bankruptcy protection in the United States, but says its Australian operations in Queensland and New South Wales are not affected, according to ABC News.

In a statement, Peabody Energy said it had filed for Chapter 11 bankruptcy protection to shore up its balance sheet and cut debt amid what it called “an unprecedented industry downturn”.

Peabody president and chief executive Glenn Kellow said it was a difficult decision but the right path forward for the company.

“This process enables us to strengthen liquidity and reduce debt, build upon the significant operational achievements we’ve made in recent years and lay the foundation for long-term stability and success in the future,” Mr Kellow said.

According to ABC News, Peabody’s financial report said the firm owes US$10.1 billion. Its total assets are worth US$10.9 billion. It made a loss of US$2 billion in 2015.

Chapter 11 bankruptcy in the US allows companies to restructure to keep the business afloat, and allowing payment to creditors over time. US mining operations are set to continue as normal during this process.