The news follows confirmation from a Texas legal firm that an investigation is underway regarding a possible breach of fiduciary duty within the miner's board of directors.

On May 16, Standard & Poor’s ratings services downgraded the Appalachia-focused giant from a B to a B-minus rating due to lowered performance expectations and a weaker demand for coal.

Patriot has experienced consistent losses in share value since forecasting reduced sales earlier this month and posted a $US75.3 million net loss for this year’s March quarter compared to a $15.9 million loss during the same period last year.

Irl F Engelhardt has been named chairman and chief executive, succeeding Richard M Whiting who served as president and chief executive since 2007.

Bennett K Hatfield will take over as president and will continue to serve as chief operating officer responsible for overseeing the execution of sales and marketing plans.

Michael M Scharf was named lead independent director of the board.

Engelhardt was upbeat about the new leadership team.

“Ben and I will immediately focus on improving Patriot’s competitive position as well as its financial structure to enhance value for our shareholders and all other groups who have a stake in the company’s success,” he said.

“Our team has successfully navigated the inherent cycles in the energy industry in the past, and I am confident Patriot can overcome the industry challenges that we currently face.

“As we move forward, I could not have a better operating partner than Ben, who has demonstrated outstanding leadership and a deep knowledge of the coal industry in his 30-year career.”

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.