The owner of the largest closely held U.S. coal producer said more of his competitors are likely to go bankrupt because there’s “nothing on the horizon” to suggest demand and prices will recover.
“Some companies have been totally erased by bankruptcy or significant liquidity problems, and other probable company financial failures have been identified by us,” Robert E. Murray said today in a speech at an industry conference in Pittsburgh organized by Platts. He declined to identify companies that may be at risk.
“We are planning for a somewhat reduced coal marketplace, in terms of prices and demand, through at least next year, with only a possible slight improvement in the years beyond,” said Murray, the founder, chairman and chief executive officer of Murray Energy Corp.
U.S. producers James River Coal Co. and Patriot Coal Corp. have filed for bankruptcy since the start of 2012 as cheap natural gas supplies, spurred by the fracking boom, undermined demand from U.S. utilities for coal. Tighter pollution regulations, of which Murray is an opponent, are also leading to the closing of some coal-fired power plants.
Murray said he’s helping to fund Republican Party efforts for the November mid-term elections and that global warming is a hoax.
“The insane, regal administration of King Obama has ignored science, economics, our poorer citizens and those on fixed incomes, our manufacturers, and the constitution, as it has bypassed our Congress,” he said today.
U.S. coal stocks have tumbled amid the decline in prices for both thermal coal and metallurgical coal, which is used to make steel. Walter Energy Inc. was down was as much as 11 percent today in New York trading while Alpha Natural Resources fell 9.1 percent and Arch Coal Inc. declined 8.7 percent.
Murray said his company has 12 large, active underground mines, 7,400 employees, and should produce 65 million tons of coal this year. The St. Clairsville, Ohio-based company bought coal assets including five West Virginian mines from Consol Energy Inc. last year for about $850 million.
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