Arch Coal says it expects its mining operations and customer shipments to continue uninterrupted throughout the reorganization.
The company says the restructuring agreement with lenders will eliminate more than $4.5 billion in debt from its balance sheet and “position the company for long-term success,” despite plummeting demand for coal.
In August, Arch Coal agreed to pay a $2 million civil penalty and conduct comprehensive upgrades to its operations to ensure compliance with the Clean Water Act, under a settlement announced by the EPA and the US Department of Justice.
The settlement resolved hundreds of Clean Water Act violations related to illegal discharges of pollutants at the companies’ coal mines in Kentucky, Pennsylvania, Maryland, Virginia and West Virginia.
Arch Coal isn’t the first coal company to file for bankruptcy protection as coal prices fall.
Also in August US coal supplier Alpha Natural Resources filed for Chapter 11 bankruptcy protection, just hours before the EPA announced its final version of the Clean Power Plan, which sets strict carbon emission limits for coal-fired power plants.