A subsequent sharp drop in prices, stricter pollution controls and increasing competition from natural gas has made it difficult for heavily indebted producers like Arch Coal to overhaul their balance sheets. Arch said on Monday it has an agreement with more than 50 percent of its first-lien lenders for its debt-cutting plan and enough capital to run its operations smoothly throughout the restructuring process. "After carefully evaluating our options, we determined that implementing these agreements through a court-supervised process represents the best way to solidify our financial position and strengthen our balance sheet," Chairman and Chief Executive John Eaves said in a statement.
The company expects mining operations and customer shipments to continue uninterrupted. Shares in leading US coal producer Peabody were down 16.3 percent at $5.58, reaching a record low. Producers accounting for more than 25 percent of US coal are currently in bankruptcy, based on 2013 government figures of major US coal companies' production.