Seattle-based clean technology company First Mode has entered Chapter 11 bankruptcy proceedings following the withdrawal of financial support from its majority shareholder, Anglo American. The company, which specializes in developing zero-emission solutions for heavy industrial vehicles, filed for bankruptcy protection on Sunday as part of an effort to sell assets and wind down operations.

Court documents reveal the extent of First Mode’s financial struggles, with the company facing nearly $100 million in liabilities. The workforce has seen a dramatic reduction over the past year, dropping from 228 to 66 employees. As part of the bankruptcy process, Indiana-based power company Cummins has submitted a “stalking horse” bid to acquire assets.

The bankruptcy filing marks a significant downturn for a company that, just a year ago, was involved in a $1.5 billion transaction with global mining giant Anglo American. The deal, which gave Anglo American an 81.4% ownership stake, was intended to advance the development of zero-emission hydrogen fuel-cell powertrains for mining trucks, beginning with Anglo American’s own fleet.

However, 2023 proved challenging for First Mode. In January, the company announced a strategic shift away from hydrogen-battery powertrains in favor of hybrid diesel-battery systems. This change was accompanied by the first of multiple workforce reductions, with an initial cut of approximately 20% of U.S.-based employees, followed by additional layoffs in August.

First Mode’s journey began in 2018 when former employees of Planetary Resources, an asteroid mining venture, established the company. Initially focused on space projects, including collaborations with NASA on the Perseverance rover and Psyche missions, the company pivoted to industrial applications in 2019, forming a close
partnership with Anglo American.

One of First Mode’s notable achievements was the development of a hydrogen-fueled hybrid powerplant for Anglo American’s nuGen mining truck, which debuted in South Africa in 2022 as the world’s largest zero-emission vehicle. The subsequent $1.5 billion deal with Anglo American included a $200 million investment, though Anglo American later announced plans to reduce expenses by $1.8 billion by 2026.

Despite maintaining its Seattle headquarters, First Mode’s leadership team and administrative operations are based in London, near Anglo American’s headquarters. The company also established presence in Australia and Chile. Earlier this year, First Mode celebrated the opening of a 40,000 square-foot Seattle factory dedicated to manufacturing powertrain conversion kits for mining trucks, an event attended by Washington Governor Jay Inslee and Albert Gore, executive director of the Zero Emission Transportation Association.

The bankruptcy filing, supported by Anglo American, aims to facilitate an organized sale of assets and business wind-down. This development represents a sudden reversal of fortune for a company that showed promise in the clean technology sector, particularly in the realm of industrial vehicle decarbonization. The situation highlights the challenges faced by companies working to develop and implement sustainable solutions in heavy industry, even with significant corporate backing and innovative technology.