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UBB deal calls for safety improvements, resolves fines

CHARLESTON, W.Va. -- Federal prosecutors this morning announced details of a $200 million deal in which Alpha Natural Resources promises to implement "groundbreaking" safety improvements, while also resolving tens of millions of dollars in government fines related to violations at the Massey Energy operations it purchased six months ago.

U.S. Attorney Booth Goodwin said his settlement with Alpha requires the company to spend $80 million over the next two years on new equipment, safety training and beefed up staffing at all of its underground mines in the United States.

Improvements include digital equipment to monitor air-flow velocity and direction underground and real-time meters to ensure compliance with limits on the presence of explosive methane and coal dust.

Alpha must also perform a study to determine if its mines have adequate staffing to clean up accumulations of explosive coal dust, accelerate research on new ways to control dust accumulations, and install new emergency oxygen equipment for miners. The company will build a new state-of-the art training center at its regional office in Julian and set up an aggressive new schedule of worker and supervisor training programs.

"We think that these requirements set a new standard for what can and should be in place to protect coal miners," Goodwin said in an interview with the Gazette.

Alpha, which bought UBB mine owner Massey Energy in June, will create a $48 million trust to fund mine safety research at academic institutions and $46.5 million in restitution for the families of the disaster victims.

The restitution would provide $1.5 million each for families of the 29 miners who died and the two miners who were most seriously injured in the April 2010 explosion in Raleigh County. But, that amount is not in addition to any settlements already reached in civil suits against Massey, and any future settlement money would count toward the $1.5 million.

During a press conference in Charleston, Goodwin said his office was trying to "provide a floor," or a minimum amount each family would receive, and could not explain why he did not set that floor at $3 million -- the amount that Massey had already agreed to pay some families who resolved wrongful death cases.

"We did not undertake the complex and complicated judgments necessary to determine exactly what that amount should be," Goodwin said. "Necessarily, you always have to strike a balance and we tried to strike a balance here."

Under the deal, Alpha will also pay $35 million to resolve pending civil penalties at all of its former Massey operations.

That figure includes the $10.8 million in civil penalties MSHA plans to announce this afternoon related to Upper Big Branch, officials said. Alpha has also agreed to pay the amounts currently on the books for all unresolved penalties for violations at what it calls "Massey legacy operations."

Neither Alpha nor its Performance Coal subsidiary, which operated Upper Big Branch, are pleading guilty to any criminal charges.

Instead, the government is agreeing to not bring any potential charges against the companies in exchange for payment of the fines and victim restitution, and timely implementation of the safety improvements.

Key to the deal, though, is that -- unlike a previous deal with Massey following the Aracoma Mine fire -- the Justice Department is not agreeing to never bring charges against any individual executives, officers or employees of Massey or Performance. Goodwin said resolution of issues with Alpha allows prosecutors to focus their resources on potential cases against such individuals.

"Our team will still be in place," Goodwin said. "This gives us the opportunity to move forward with other aspects of the case."

Attorney General Eric Holder said in a statement, "The tragedy at Upper Big Branch will never be forgotten, and the families affected by it will never be made completely whole again.

"Today's agreement represents the largest ever resolution in a criminal investigation of a mine disaster and will ensure appropriate steps are taken to improve mine safety now and will fund research to enhance mine safety in the future," Holder said. "While we continue to investigate individuals associated with this tragedy, this historic agreement -- one of the largest payments ever for workplace safety crimes of any type -- will help to create safer work environments for miners in West Virginia and across the country."

Goodwin's announcement this morning somewhat stole the show from MSHA, which had previously scheduled a noon briefing for families and a 3 p.m. press conference to release the long-awaited report of its investigation into the worst U.S. coal-mining disaster in nearly 40 years.

The MSHA report largely mirrors previously released findings by a team led by independent investigator Davitt McAteer and a report from United Mine Workers safety experts. And in some ways, the formal MSHA report is just elaborating on the agency's previous public statements about its preliminary findings, outlined in detail at a public briefing in late June.

All three investigations agree that the explosion involved an ignition of a small amount of methane gas that transitioned into a massive coal-dust explosion because of Massey's poor safety practices. The ignition likely was sparked by worn-out longwall cutting teeth hitting sandstone. The spark grew out of control because water sprays meant to control it weren't working, and the blast erupted into a huge explosion when it hit large amounts of coal dust Massey had not cleaned from underground tunnels.

MSHA investigators also focused their report on a wealth of evidence that Massey covered up safety conditions at Upper Big Branch, by keeping hazards out of official record, warning workers underground of impending inspections, and intimidating miners to keep them from reporting safety concerns to the government.

But MSHA investigators offered a somewhat different conclusion as to the source of the methane involved in the initial ignition.

The McAteer team said the methane came from the mined-out "gob" area behind the longwall machine, while MSHA concluded it came from a gas reservoir located along geological faults that were the likely source of methane in previous incidents at the mine in 1997, 2003 and 2004. MSHA investigators believe small amounts of methane migrated from the mine floor and onto the longwall cutting tool, or shearer, from the longwall's roof supports, or shields. MSHA investigators believe that Massey did not follow its agency-approved ventilation and roof control plans, short-circuiting fresh-air flow deep in the mine, contributing to the methane buildup and ignition.

Reach Ken Ward Jr. at or 304-348-1702.

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