Tuesday, December 06, 2011

Company That Bought Massey Energy Pays $200 Million Settlement Over Mining Disaster That Killed 29

Alpha Natural Resources, which purchased Massey Energy in June 2011, has agreed to a $209 million settlement in restitution and civil and criminal penalties for the role Massey Energy in the mining disaster in West Virginia that killed 29 miners.

Massey Energy flagrantly disregarded numerous safety rules and regulations in its operations at the mine, which led to the explosion and death of 29 miners.
The settlement, first reported by the Charleston Gazette, follows months of investigative work by federal officials from the Departments of Justice and Labor, as well as an independent commission appointed by the former West Virginia governor. The findings that had been made public placed the blame for the blast squarely on Massey and what investigators said was its reckless disregard for safety standards, but had stopped short of assigning criminal blame.

Tuesday’s announcement, which will be made public after federal investigators meet with families of the victims in West Virginia, will detail criminal responsibility, that Alpha, and in turn Massey, which it now owns, will accept.

In the past, Massey, which was purchased by Alpha in June, had dismissed investigators charges that its actions led directly to the disaster.

“It’s a record-level settlement,” said a former federal mine safety chief, J. Davitt McAteer, who conducted the independent state investigation, which issued the first findings about the explosion this year. “This is an amount that will get companies to pay attention. It has to affect their bottom line, otherwise it doesn’t mean anything.”

The settlement does not protect individual Massey managers, including the former chief executive, Don L. Blankenship, who have not been charged. In all 18 executives refused to be interviewed by federal investigators, invoking their Fifth Amendment rights.

In addition to the $46.5 million payout to victims and families, the agreement includes $80 million to bolster safety and infrastructure in all underground mines owned by Alpha and Massey; $48 million to establish a mine health and safety foundation to be used to finance academic research on mine safety; and about $35 million in fines and fees that Massey owed to the Mining, Safety and Health Administration, the branch of the Department of Labor that oversees the mining industry.

Under the terms of the agreement, Alpha must also put in place a plan that guarantees it has enough safety equipment, ventilation and methods of clearing potentially explosive rock dust out of all its underground mines within 90 days.

The company will be required to build a state-of-the-art training facility in West Virginia, including a mine lab where it will be able to simulate mining disasters.
The key detail here is that Alpha made the settlement after buying up Massey; Massey had done an insufficient job in dealing with the aftermath of the disaster. In many respects, Alpha is cleaning up the mess that Massey and its corporate leaders made. It's also good that Alpha is going to bolster safety and infrastructure at all its mining operations.

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