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Peabody’s bankruptcy claim is a symbol of coal’s end

TJ Ryan Foundation Board member John Quiggin writes in The Conversation (14.4.16) about the global coal mining company, Peabody, filing for bankruptcy in the United States, and how this signifies another ‘death knell’ for the coal mining industry, including in Australia.

‘The announcement that Peabody Energy, the world’s largest non-government coal company, is to file for bankruptcy in the United States is one of more symbolic than substantive significance. In the US context, bankruptcy is a fairly routine form of financial reorganisation, rather than a prelude to liquidation.

‘Peabody sold about 250 million tonnes of coal in 2014 from mines in Australia and the United States.

‘The most important substantive effect is that Peabody may be able to avoid paying some of its debts, notably obligations to retired and retrenched coalminers and the cost of rehabilitating abandoned mines.

‘The operation of Peabody’s Australian mines is unlikely to be affected immediately. It was the purchase of these mines at inflated prices during the coal boom that tipped Peabody over the edge, though the end was, in some sense, inevitable.’

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