Coal news and updates

Central Appalachian coal producer JW Resources files for bankruptcy

JW Resources filed for chapter 11 bankruptcy on Tuesday, according to court documents, joining Xinergy and Patriot Coal as the third Central Appalachian coal producer to do so this year. Calls to JW Resources seeking comment were not returned Wednesday.

The Knoxville, Tennessee-based company and its subsidiary Straight Creek Coal Mining own and operate mines and preparation plants in southeast Kentucky.

JW Resources acquired its coal assets in February 2013, purchasing the Straight Creek and Red Bird thermal coal mining operations from Xinergy for $47.2 million in cash.

In its bankruptcy filing, JW Resources said: "Following the Straight Creek acquisition, there has been a decrease in the demand for coal and a dramatic increase in the cost of mining and processing coal, due in part to burdensome governmental regulations, with the spot price of coal per ton decreasing by 26% through April 2015."

JW Resources also said it has filed a motion seeking permission to sell "substantially all" of its assets through an open auction process under the bankruptcy code.

According to US Mine Safety and Health Administration data, Straight Creek had only three active mines in 2015, the Ky No. 6, No. 7 and No. 9 surface mines. In the first quarter of the year, the three mines produced 83,848 st of coal, compared with 129,295 st in the year-ago period.

JW Resources is a portfolio company formed by Bayside Capital, an affiliate of the global private investment firm H.I.G. Capital.

Middlesboro Mining Operation, another coal company formed by Bayside Capital with facilities in Kentucky and Tennessee, was not part of the bankruptcy filing.

source: http://www.platts.com