Coal Company Rhino Resource Partners Files For Bankruptcy
Kentucky-based coal company Rhino Resource Partners LP filed for Chapter 11 bankruptcy on Wednesday, joining a growing list of Ohio Valley coal producers seeking financial restructuring as the U.S. coal industry continues to struggle.
According to court documents, the company and its subsidiaries currently employ about 550 workers at underground and surface mines located in Kentucky, Ohio, Virginia, West Virginia and Utah. In 2019, Rhino Resources produced about 3.2 million tons of coal.
The company reports $162.1 million in liabilities. In April, Rhino received a $10 million Paycheck Protection Program loan under the COVID-19 relief bill, the CARES Act.
In court filings, the company said market forces pushed Rhino, like many of its competitors including Murray Energy, Blackjewel L.L.C. and Blackhawk Mining, into bankruptcy. In particular, Rhino cited a weakening in the market for metallurgical coal, or coal used to make steel, beginning in the fall of 2019.
Rhino subsidiary Jewell Valley Mining, purchased mines and other assets from coal operator Blackjewel. Last summer, the coal operator grabbed headlines when a group of miners spent nearly two months blocking a loaded coal train as a protest to demand payment of millions in owed wages.
“Rhino has been taking steps to improve both the performance and financial strength of our business,” CEO Rick Boone said in a press release. “While these strategies have gained positive momentum, they have not produced sufficient liquidity to continue operating our business and servicing our outstanding obligations.”
The company said it has entered into a stalking horse purchase agreement and reached an agreement to obtain a $11.75 million loan to help get it through the bankruptcy process.
The company, which was publicly-facing from 2010-2016, was previously run by the now head of the federal Mine Safety and Health Administration, David Zatezalo. During his tenure, Rhino racked up serious mine health and safety violations. He stepped down from the company in 2013.