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 in Queensland and NSW. It spent $6.5 billion to buy Australian miners such as Excel and Macarthur Coal in the past decade, buying Macarthur at what has in retrospect proved to be near the top of the market.
Peabody's deepening financial woes come as other local coal miners retrench staff and dump mines amid the worst downturn in the coal market in decades. Last week, BHP axed 300 jobs in the Hunter Valley, citing continued low prices, and Rio Tinto is seeking to offload the bulk of its local mines. 
The troubled miner has declared a 30-day grace to make interest payments of $US71 million on two sets of borrowings and if the payments cannot be made, it could declare bankruptcy as it seeks to reorganise its finances in a bid to stay afloat.
Its warning came after the recent collapse of other large US coal producers such as Arch Coal and Alpha Natural Resources. The US coal industry is facing structural decline as low gas prices encourage users to switch energy sources.
"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 $US2.19 in sharemarket trading. The fall continued in after-hours trading.
Peabody said it intended using the 30-day "grace period" to discuss funding alternatives with its lenders.
Peabody told employees it was "business as usual" as it works through the issues.
"Our mines continue in the normal course of operations," said Amy Schwetz, the chief financial officer. "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."
Peabody's warning came amid continued difficulties for its Australian mines that forced a move on trimming output as it tries to revive earnings.
In 2015, it sold about 36.3 million tonnes from its Australian mines,
In Queensland, Peabody operates 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 about 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 tonnes for 2016, of which coking coal would be 14-15 million tonnes 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. The full-year figure was $US175.4 million, up from $US113 million. The loss per tonne of Australian coking coal was $US4.02, with steaming coal earning $US7.76 a tonne, it said.