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Created before Nov 2016
Last update: 2016-09-06 00:18:38 BankTrack
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Arch Coal is a public company, listed on the NYSE as ACI.
About Arch Resources
Arch Coal is an American coal mining and processing company. The company mines, processes, and markets bituminous and sub-bituminous coal with low sulfur content in the United States. Arch Coal is the second largest supplier of coal in the U.S. behind Peabody Energy. The company supplies 15% of the domestic market. Demand comes mainly from generators of electricity.
In April 2014 Arch Coal had a market capitalization of USD one billion, a 12 month total equity return of -1.2% and a Credit rating (Standard & Poor's) of B. The company turned over USD2.9 billion in 2014 and has about 4,600 employees.
In January 2016 the company filed for bankruptcy in order to facilitate its debt restructuring. Arch Coal, saddled with debt since its 2011 acquisition of International Coal Group, has been suffering from a sharp drop in coal prices, stricter pollution controls, falling demand from China and increasing competition from natural gas.
Social and human rights impacts
The Adkins Fork mountaintop removal mine risks violating fundamental human rights.
- Potential water, noise, and air pollution impacts from the mine raise concerns about human rights to water and health of residents of Blair in west-Virginia.
- Arch's past mining operations near Blair, according to testimony of Arch officials, "would make life so miserable for many Blair residents that they would want to sell their homes and move", which implicates the right to housing.
- Human rights norms also proscribe the intentional destruction of cultural heritage sites such as the Blair Mountain battlefield.
Effective human rights risk management is no longer "optional" for banks.
- Six of the nine banks involved with Arch's most recent corporate loan have committed to avoid transactions that pose significant human rights risks.
- Seven of these banks have committed to the United Nations Environment programme Finance Initiative's "precautionary approach" to address the social and environmental impacts of the financial sector.
- New UN guidelines have established a global baseline for the corporate responsibility to respect human rights. Accordingly, Arch's lenders should reassess their financial ties to Arch and strengthen their human rights due diligence mechanisms.
Environmental and climate impacts
As a mountaintop removal mine, Arch Coal's proposed Adkins Fork mine would damage the environment and human health. Recent studies of mountaintop removal mining found that the practice causes "pervasive and irreversible" environmental damage and is associated with elevated risks of cancer, heart disease, kidney disease, birth defects, and premature mortality in nearby communities.
The EPA has been disputing the legality of Arch Coal's permit to expand its Spruce No. 1 mine for nearly 15 years. The expansion would make the mine one of the largest in the region. In 2013, the EPA withdrew a permit allowing Arch Coal to dump contaminated waste from the Spruce No. 1 Mine into local streams.
Arch Coal is criticized in Montana for its planned expansion of the Otter Creek coal mine. The proposed mining site lies between two national forests and would cover 7,639 acres of land. Environmental regulators stated that applications for the mine and a corresponding coal-transport railroad were incomplete. Mining activities have been postponed pending further environmental studies. Last year, Arch Coal agreed to a settlement of USD575,000 for Clean Water Act violations at its Eastern Kentucky mines.
Arch Coal's proposed Adkins Fork mountaintop removal mine would have major negative historic preservation impacts. The mine would destroy the heart of the Blair Mountain battlefield site, which has been acknowledged to be historically significant by both the National Register of Historic Places and the National Trust for Historic Preservation.
Arch Coal files for bankruptcy
Arch Coal, the second-largest U.S. coal miner, filed for Chapter 11 bankruptcy protection with a plan to cut $4.5 billion in debt from its balance sheet in the midst of a prolonged downturn in the coal industry. Arch Coal, saddled with debt since its 2011 acquisition of International Coal Group, has been suffering from a sharp drop in coal prices, stricter pollution controls, falling demand from China and increasing competition from natural gas.
Above banks were involved in a November 2012 syndicated term loan to Arch Coal, issued November 2012, that will mature in June 2019.