- By Region
Alpha Natural Resources has agreed to pay about $210m in fines and restitution in an effort to close a series of civil and criminal probes related to a disaster at a mine in West Virginia that killed 29 coal miners in April 2010.
Tuesday’s agreement settles inquiries launched by federal regulators, such as the Department of Justice, into the disaster at the Upper Big Branch mine near Montcoal, as well as other health and safety investigations under consideration by Mine Safety and Health Administration.
Alpha was not directly responsible for the accident at the Upper Big Branch mine, but inherited the liabilities after it acquired Massey Energy in June. Alpha has the second biggest coal reserves in the US and operates about 150 mines.
While the settlement, the largest ever for a US investigation of a mining disaster, limits some of Alpha’s corporate exposure, it does not remove the threat of civil suits by individuals or further actions against former Massey employees. In October, a federal jury found the former head of security at the Montcoal mine guilty of lying to investigators.
In a statement, Alpha said that it had “co-operated fully” with federal and state regulators since purchasing Massey and that it had “implemented extensive measures to improve health and safety at legacy Massey operations”.
As part of the settlement, Alpha agreed to provide $46.5m to families of miners killed in the disaster, to pay $34.8m to resolve mine safety rule violations and to invest $128m in mine safety training in West Virginia and safety improvements at its mines.
Booth Goodwin, the US attorney in Charleston, West Virginia, insisted that “no individuals are off the hook” and said that under the “non-prosecution agreement”, Alpha would not be charged as long as it abided by the terms of the settlement.
Shares in Alpha, which have lost more than half their value since the start of the year in line with the rest of the coal mining sector, fell about 4 per cent to $24.28 in midday trading in New York on Tuesday.
In May, an independent panel convened by the governor of West Virginia, issued a damning report, arguing that the explosion at Upper Big Branch could have been prevented and resulted from Massey’s failure to meet key safety standards and from poor regulatory oversight.
In the run-up to what was the worst mining disaster in 40 years, Massey received hundreds of violation notices from inspectors but largely avoided additional scrutiny after agreeing to institute plans to improve its systems.
“The story of Upper Big Branch is a cautionary tale of hubris,” investigators wrote. “A company that was a towering presence in the Appalachian coalfields operated its mines in a profoundly reckless manner, and 29 coal miners paid with their lives for the corporate risk-taking.”
A separate federal investigation concluded in June that Massey officials had deliberately misled government inspectors, maintaining two sets of safety books in order to keep accounts of dangerous conditions away from official scrutiny.