Thousands of Australian jobs are under threat with the largest privately owned coal miner in the world, Peabody Energy, warning overnight its financial survival was under a cloud.
The company operates a string of coal mines spread across Queensland and NSW having outlaid $6.5 billion to acquire Australian miners such as Excel and Macarthur Coal over the past decade, buying Macarthur at what has proven in retrospect to be near the top of the market.
Peabody's deepening financial woes come as other local coal miners have been retrenching staff and dumping mines amid the worst downturn in the coal market in decades. Just last week, BHP axed 300 jobs from one of its mines in the Hunter Valley, citing continued low prices, while Rio Tinto is seeking to offload the bulk of its local mines.  
The troubled miner has declared a 30-day grace period to make interest payments of $US71 million on two sets of borrowings and if the payments can't be made, it could declare bankruptcy as it seeks to reorganise its finances in a bid to stay afloat.
Its warning came in the wake of the collapse of other large US coal producers such as Arch Coal and Alpha Natural Resources in recent months. The US coal industry is facing structural decline due to low gas prices, which has encouraged energy users to switch energy source.
"We may not have sufficient liquidity to sustain operations and continue as a going concern," Peabody told investors in a statement in the US on Wednesday.
Investors responded by savaging Peabody's shares, which fell 45 pr cent to just $US2.19 in sharemarket trading, and has continued falling in after hours trading.
Peabody said it intends using the 30-day 'grace period' to discuss funding alternatives with its lenders. 
In a statement to employees, Peabody said it is 'business as usual' as it seeks to work through the issues at hand.
"Our mines continue in the normal course of operations," Amy Schwetz, the company's chief financial officer said. "Regarding our important relationships with suppliers, we continue to transact as normal, abiding by the terms of our vendor agreements."
"This has no effect on day-to-day operations," she said. 
Peabody's warning came amid continued difficulties for Peabody's Australian mines which has forced it to move to trim output as it tries to revive earnings.
In 2015, it sold around 40 million tons of coal,, which is equal to around 36.3 million tonnes, from its Australian mines,
In Queensland, Peabody operates mines such as the Burton and Coppabella mines which are near Mackay, along with the Middlemount, Millennium and Moorvale mines, all in Queensland, and also the North Goonyella mine.
In NSW it operates the Metropolitan mine near Wollongong, the Wambo mine near Singleton in the Hunter Valley and the Wilpinjong mine near Mudgee, further west.
Australian revenue accounts for around 40 per cent of group revenues, with local revenues totalling $US2.7 billion.
Due to continued low prices and losses in its coking coal operations, Peabody has signalled a reduction in Australian coal output to 34-36 million tons for 2016 of which coming coal would be 14-15 million tons and steaming coal the balance.
In the   December quarter Australian revenue fell to $US465.6 million from $US676.3 million with annual revenue dropping to $US2 billion from $US2.7 billion. The adjusted EBITDA for Australia was $US23.7 million down from $US77.3 million for the quarter with the full year figure standing at $US175.4 million, up from $US113 million.
The loss per ton of Australian coking coal was $US4.02 but with steaming coal earning $US7.76 a tonne, it said recently.