The news comes just days after Patriot’s reduced sales projections sank US coal stocks and the company’s data for the first quarter of 2012 marked a net loss of $US75.3 million.

The New York-based financial services company said the miner remained on CreditWatch with negative implications.

“The CreditWatch listing reflects a decline in coal production as a result of weaker demand for metallurgical coal in the export market and weaker demand for thermal coal because of a warmer-than-normal winter and natural gas substitution that has consequently lowered our expectations for 2012 [earnings before interest, tax, depreciation and amortisation] and has, in our view, the company continuing to burn cash,” Standard & Poor credit analyst Maurice Austin said on the ratings service website.

The Wall Street Journal noted Patriot was now six levels below the S&P’s threshold for “investment grade” credit rating.

St Louis-based Patriot spun off from Peabody Energy in 2007 and is now one of the largest coal miners east of the Mississippi River.

It operates 13 mining complexes in West Virginia and Kentucky and controls about 1.9 billion tons of proven and probable reserves.

In April the miner mothballed its Freedom underground mine near Henderson, Kentucky, citing weak thermal coal markets.

Freedom produced 1.2 million tons of thermal coal in 2011.