CHARLESTON, W.Va. - A well-known phrase in coal communities, particularly during a down market, is that coal is cyclical. Several generations of miners have used these words to describe the highs and lows of our sector - as well as the sometimes vast divide between those extremes.
Right now, we're undoubtedly experiencing a historic low in the coal industry, but this time, we can't merely attribute the challenges our industry is facing to coal's cyclical nature. Unfortunately, the current landscape is far more complex.
I believe there's been more change in the industry in the past three years than the prior three decades combined. A host of economic, competitive and regulatory factors have converged to impose incredible stress upon our industry.
More than 43 bankruptcies have been initiated by U.S. coal companies since early 2012. That's an average of one bankruptcy per month over that time period. Though striking and unfortunate, these statistics are indicative of the transformational changes occurring in the industry.
These challenges have also taken an unmistakable toll on our business at Alpha Natural Resources. On Monday, Alpha and certain of its affiliates filed Chapter 11 bankruptcy petitions to restructure our finances and operations. News like this is understandably met with concern and uncertainty about what it means for individual employees and their families, retirees, the many organizations with which we have working relationships, and the broader communities in which we operate. So, let me make a couple of things clear.
First, we are open for business. We intend to keep mining and supplying coal as we move through this process, which means we will continue employing hardworking coal operators and support personnel. Since the announcement, we have been actively engaged in discussions with employees, customers and many other stakeholders, reiterating our intention to continue operating and providing jobs for thousands of people across the enterprise. Most important, Alpha remains committed - as always - to safety, environmental stewardship and (as we like to say) "Running Right."
We remain a member of the communities in which we operate. While our charitable giving program has been temporarily suspended as we navigate these extremely challenged markets, we value the relationships we have forged in the communities where our affiliated employees live and work, raise their children, worship and contribute their own time and energy to local causes and events.
Though the days and months ahead will inevitably be tough, the decision to take this path was a strategic one, and it came after many months of thorough, deliberative analysis to evaluate the advantages, drawbacks, implications and outcomes of taking this action. We believe restructuring is the best option at this time for our organization, and we fully intend to emerge from this process as an agile company, with a diversified resource base and better positioned for the future.
Alpha is not alone in this struggle. No coal company has been immune from the market and regulatory pressures of the last several years. As coal counties know all too well, the ripple effect from this downturn also seems unending, with virtually every small business, community center and gas station feeling the pinch along with us.
Clearly, this has been more than just another cycle in the sector, and we will continue to adjust our operating footprint to market and customer demand.
But as our industry works through its current challenges, I believe there's also transformational opportunity for companies willing to take proactive, strategic action. In my view, the coal industry must go through significant restructuring and consolidation to find success within the sector's contracted market share, but success can - and will - be found.
By providing affordable power and steel for infrastructure, coal continues to fuel progress around the globe. We produce a valuable resource that has driven economic growth in this region and will continue to play an arguably reduced, but still significant, role far into the future. We intend for Alpha to be a part of that future and we appreciate your patience and support as we work together toward that goal.
A dedicated website, AlphaRestructuring.com, provides information to employees, retirees, vendors, customers, investors, community members and other stakeholders about the process.
Kevin S. Crutchfield is chairman and CEO of Alpha Natural Resources.