Coal company stocks down after Patriot Coal bankruptcy
(Reuters) - Coal mining shares fell on Tuesday, a day after Patriot Coal Corp (PCXCQ.PK) filed for bankruptcy and sparked fears that other companies might follow suit.
"At present, we are of the view that Patriot will be the only public company, at least for a while, to face this potential outcome," said analyst Mark Levin of BB&T Capital Markets.
But he said James River Coal Co (JRCC.O) "is frequently mentioned as another potential victim."
Coal prices have plummeted this year as electricity producers have turned to cheaper natural gas. Also, the U.S. Environmental Protection Agency has proposed new rules that would make it nearly impossible to build coal-fired power plants.
In afternoon trading on NASDAQ, James River stock was down 25 percent at $2.14.
On the New York Stock Exchange, Alpha Natural Resources (ANR.N) fell 7.2 percent to $7.44, Arch Coal (ACI.N) dropped 8.6 percent to $6.09, Peabody Energy (BTU.N) was 4.4 percent lower at $22.27, and Consol Energy (CNX.N) was down 3 percent at $29.41.
"James River did refinance, so they are over the hurdle, but their free cash flow is negative for the next two years," said analyst Bill Burns of Johnson Rice & Co in New Orleans. "People are worried about the same thing (bankruptcy) happening."
(Reporting by Steve James; editing by John Wallace)
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