Post by John on Dec 6, 2011 18:17:44 GMT -5
Mine Owner to Pay $200 Million in Death of 29 Men
By SABRINA TAVERNISE and CLIFFORD KRAUSS
Published: December 6, 2011
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In what officials say is the largest settlement ever in a government investigation of a mine disaster, Alpha Natural Resources agreed to pay $209 million in restitution and civil and criminal penalties for the role of its subsidiary, Massey Energy, in a 2010 mine explosion that killed 29 men in West Virginia.
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Luke Sharrett/The New York Times
A truck passed the Upper Big Branch mine in Montcoal, W. Va. in April 2010, days after 29 men were killed there.
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Lost at Upper Big Branch
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2 Mines Show How Safety Practices Vary Widely (April 23, 2010)
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That amount includes $46.5 million allocated to the families of the victims and those who were injured in the blast, and includes terms that protect Alpha — but not individual Massey executives — from criminal prosecution, said Steven Ruby, an assistant United States attorney for the Southern District of West Virginia.
The announcement of the settlement came the same day that the Mine Safety and Health Administration imposed a $10.8 million fine — the largest in its history — on the company as it wrapped up its investigation into the April 2010 explosion.
The federal agency said Massey and its subsidiary, which was operating the Upper Big Branch mine at the time of the blast, had been cited a total of 369 times, including for improperly training miners, allowing hazardous levels of loose coal and coal dust to accumulate and for failing to comply with ventilation plans.
“The investigation found that the operator promoted and enforced a workplace culture that valued production over safety, including practices calculated to allow it to conduct mining operations in violation of the law,” the agency said in a statement.
The investigation and the settlement, which was first reported by The Charleston Gazette, follows previous inquiries by federal officials from the Departments of Justice and Labor, as well as by an independent commission appointed by Joe Manchin III, then the governor and now a United States senator.
The announcement was made after federal investigators met with families of the victims in West Virginia.
“We believe this can change the way mining is done,” R. Booth Goodwin II, the United States attorney for the Southern District of West Virginia, said Tuesday. Mr. Goodwin said there had been no discussions between federal prosecutors and Massey about a settlement before Alpha bought Massey in June.
In a statement Tuesday, Kevin Crutchfield, Alpha’s chief executive, said that “the agreements we’ve reached represent the best path forward for everyone.”
In the past, Massey had dismissed investigators’ charges that its actions had led directly to the disaster.
J. Davitt McAteer, a former federal mine safety chief who conducted the independent state investigation into the disaster , said the settlement was a positive step toward ensuring safer mines in the country.
“This is an amount that will get companies to pay attention,” Mr. McAteer said. “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. The agreement also does not preclude victims and their families from filing civil lawsuits in the case.
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; and about $35 million in fines and fees that Massey owed to the Mine Safety and Health Administration, the branch of the Labor Department that oversees the mining industry.
“We were shooting for something that was constructive and wasn’t just writing a check to the federal treasury,” said Mr. Ruby, the assistant United States attorney.
The agreement also required Alpha to put in place a plan that guarantees it has enough safety equipment, ventilation and methods of clearing potentially explosive rock dust out of its underground mines within 90 days.
The company will also build a state-of-the-art training facility in West Virginia, including a mine lab where it will be able to simulate mining disasters, according to the settlement.
The initial response from Wall Street analysts was positive for Alpha Natural Resources.
“It’s an amount of money Alpha can pay,” said Lucas Pipes, vice president and senior coal analyst at Brean Murray, Carret and Company, a research and investment banking firm. “Investors were not sure what the liability could possibly be, but now it seems this chapter is coming to an end.”
Mr. Pipes said the accident, and the more rigorous federal enforcement that followed, had already driven home the point that mine safety needed to be taken even more seriously. “Today’s penalties are a reminder that safety also saves you money,” he added.
Among the investigations into the explosion, a report released in March by the independent team appointed by Mr. Manchin and led by Mr. McAteer determined that the disaster could have been prevented if Massey had observed minimal safety standards.
The McAteer report accused Massey of having engaged in a pattern of negligence, which allowed a “perfect storm” of poor ventilation, equipment whose safety mechanisms were not functioning and combustible coal dust.
The investigators dismissed Massey’s claims that the blast had occurred because a sudden burst of methane had bubbled from the ground, saying evidence contradicting that theory included the bodies of the miners found near the main explosion. Only two had methane in their lungs.
Federal investigators have also said that Massey kept two sets of books so that accounts of hazardous conditions in Upper Big Branch would be kept hidden from inspectors.
Sabrina Tavernise reported from Washington, and Clifford Krauss from Houston.
By SABRINA TAVERNISE and CLIFFORD KRAUSS
Published: December 6, 2011
Recommend
comments (149)
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In what officials say is the largest settlement ever in a government investigation of a mine disaster, Alpha Natural Resources agreed to pay $209 million in restitution and civil and criminal penalties for the role of its subsidiary, Massey Energy, in a 2010 mine explosion that killed 29 men in West Virginia.
Enlarge This Image
Luke Sharrett/The New York Times
A truck passed the Upper Big Branch mine in Montcoal, W. Va. in April 2010, days after 29 men were killed there.
Multimedia
Interactive Feature
Lost at Upper Big Branch
Related
2 Mines Show How Safety Practices Vary Widely (April 23, 2010)
National Twitter Logo.
Connect With Us on Twitter
Follow @nytnational for breaking news and headlines.
Twitter List: Reporters and Editors
Readers’ Comments
Share your thoughts.
Post a Comment »
Read All Comments (149) »
That amount includes $46.5 million allocated to the families of the victims and those who were injured in the blast, and includes terms that protect Alpha — but not individual Massey executives — from criminal prosecution, said Steven Ruby, an assistant United States attorney for the Southern District of West Virginia.
The announcement of the settlement came the same day that the Mine Safety and Health Administration imposed a $10.8 million fine — the largest in its history — on the company as it wrapped up its investigation into the April 2010 explosion.
The federal agency said Massey and its subsidiary, which was operating the Upper Big Branch mine at the time of the blast, had been cited a total of 369 times, including for improperly training miners, allowing hazardous levels of loose coal and coal dust to accumulate and for failing to comply with ventilation plans.
“The investigation found that the operator promoted and enforced a workplace culture that valued production over safety, including practices calculated to allow it to conduct mining operations in violation of the law,” the agency said in a statement.
The investigation and the settlement, which was first reported by The Charleston Gazette, follows previous inquiries by federal officials from the Departments of Justice and Labor, as well as by an independent commission appointed by Joe Manchin III, then the governor and now a United States senator.
The announcement was made after federal investigators met with families of the victims in West Virginia.
“We believe this can change the way mining is done,” R. Booth Goodwin II, the United States attorney for the Southern District of West Virginia, said Tuesday. Mr. Goodwin said there had been no discussions between federal prosecutors and Massey about a settlement before Alpha bought Massey in June.
In a statement Tuesday, Kevin Crutchfield, Alpha’s chief executive, said that “the agreements we’ve reached represent the best path forward for everyone.”
In the past, Massey had dismissed investigators’ charges that its actions had led directly to the disaster.
J. Davitt McAteer, a former federal mine safety chief who conducted the independent state investigation into the disaster , said the settlement was a positive step toward ensuring safer mines in the country.
“This is an amount that will get companies to pay attention,” Mr. McAteer said. “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. The agreement also does not preclude victims and their families from filing civil lawsuits in the case.
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; and about $35 million in fines and fees that Massey owed to the Mine Safety and Health Administration, the branch of the Labor Department that oversees the mining industry.
“We were shooting for something that was constructive and wasn’t just writing a check to the federal treasury,” said Mr. Ruby, the assistant United States attorney.
The agreement also required Alpha to put in place a plan that guarantees it has enough safety equipment, ventilation and methods of clearing potentially explosive rock dust out of its underground mines within 90 days.
The company will also build a state-of-the-art training facility in West Virginia, including a mine lab where it will be able to simulate mining disasters, according to the settlement.
The initial response from Wall Street analysts was positive for Alpha Natural Resources.
“It’s an amount of money Alpha can pay,” said Lucas Pipes, vice president and senior coal analyst at Brean Murray, Carret and Company, a research and investment banking firm. “Investors were not sure what the liability could possibly be, but now it seems this chapter is coming to an end.”
Mr. Pipes said the accident, and the more rigorous federal enforcement that followed, had already driven home the point that mine safety needed to be taken even more seriously. “Today’s penalties are a reminder that safety also saves you money,” he added.
Among the investigations into the explosion, a report released in March by the independent team appointed by Mr. Manchin and led by Mr. McAteer determined that the disaster could have been prevented if Massey had observed minimal safety standards.
The McAteer report accused Massey of having engaged in a pattern of negligence, which allowed a “perfect storm” of poor ventilation, equipment whose safety mechanisms were not functioning and combustible coal dust.
The investigators dismissed Massey’s claims that the blast had occurred because a sudden burst of methane had bubbled from the ground, saying evidence contradicting that theory included the bodies of the miners found near the main explosion. Only two had methane in their lungs.
Federal investigators have also said that Massey kept two sets of books so that accounts of hazardous conditions in Upper Big Branch would be kept hidden from inspectors.
Sabrina Tavernise reported from Washington, and Clifford Krauss from Houston.