We’ve recently discussed the outlook for coal and coal miners in recent times, given the falling prices for both metallurgical coal and thermal coal and the impact it might have on share prices.

The collapse of the largest US coal miner into bankruptcy protection overnight of Peabody Energy could be yet another red flag for investors in the coal sector. Of the four largest US coal producers, three have now filed for bankruptcy, including Peabody.

That shows how difficult the coal sector is currently.

Australia’s coal miners, including the likes of BHP Billiton Limited (ASX: BHP), South32 Ltd (ASX: S32), Rio Tinto Limited (ASX: RIO) and solely coal companies Whitehaven Coal Limited (ASX: WHC) and New Hope Corporation (ASX: NHC), potentially face many years of struggle with their coal mining operations.

Peabody failed to make interest payments on its debt and warned that it was likely unable to continue as a going concern prior to entering bankruptcy protection. The miner has more than US$10 billion in debts.

Shares in Peabody had crashed 99.8% over the past 5 years, thanks to sliding coal prices, and last traded at US$2.06. At its peak in 2008, the company had a market cap of around US$20 billion, but yesterday, Peabody’s market cap was just US$37 million.

Metallurgical coal, which is used in steelmaking, has plunged 75% since peaking in 2011. One of Peabody’s biggest mistakes was the $4.9 billion acquisition of MacArthur Coal Ltd in 2011, although the company’s Australian operations aren’t part of the bankruptcy. Peabody has 6 coal mines in Queensland and another 3 coal mines in NSW.

Sandra Chow, credit analyst at Singapore-based CreditSights Inc has told Bloomberg, “The outlook for coal players remains bleak. Any recovery remains a long way from here.

In the US, coal generated 33% of electricity in 2015, down from 45% in 2010, according to The Financial Times. 80% of US electricity generation shutdown in the US last year came from coal-fired power plants. And if President Obama’s clean power plan survives, more coal-fired power plants will shut, further reducing demand for coal.

As many readers will no doubt know, the biggest problem energy coal faces is the threat from renewable energy sources and cleaner fossil fuels such as natural gas. Metallurgical coal also faces sliding global steel production, particularly in China, which is not being replaced by demand elsewhere.

Forget the coal miners...

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.