Alpha Natural Resources to pay $210 million in Upper Big Branch settlement
- December 6, 2011
In the largest settlement ever in a federal investigation into a U.S. mine disaster, Alpha Natural Resources has agreed to pay $210 million in fines, restitution and mine safety improvements in response to an explosion last year at Upper Big Branch mine in West Virginia that killed 29 miners.
Alpha, based in Bristol, Va., became the mine’s owner in June of this year when it acquired Richmond-based Massey Energy, a company with one of the worst safety records in the industry. At the time of the blast on April 5, 2010, Massey faced more than 500 safety citations for violations at Upper Big Branch in Montcoal, W.Va. It owned and operated the mine through one of its subsidiaries, Performance Coal Co.
In announcing the settlement today, Booth Goodwin, U. S. attorney for the Southern District of West Virginia, said Alpha will not be charged with crimes provided that it abides by the terms of the settlement. However, the agreement does not bar future prosecution of Massey executives, including former CEO Don Blankenship and 17 others who have declined to be interviewed by federal investigators by invoking their Fifth Amendment rights.
The non-prosecution agreement with Alpha includes:
• $46.5 million in criminal restitution to the miners’ families. Each family and two co-workers who survived the explosion would receive $1.5 million.
• $35 million in penalties for federal mine safety violations at Upper Big Branch and other mines formerly operated by Massey.
• $48 million for a trust to fund research and development projects to improve mine health and safety.
• $80 million over the next two years to increase safety measures at all of Alpha’s 150 mines (not just former Massey mines). Improvements would include the latest in equipment such as digital safety sensors that continuously monitor air flow and methane and a new safety training facility in West Virginia.
Alpha also agreed to review all of its mines and to correct safety problems it finds within 90 days. Kevin Crutchfield, CEO of Alpha Natural Resources, said in a statement that “Alpha has cooperated fully with all regulatory and enforcement agencies, and we believe the agreements we’ve reached represent the best path forward for everyone. We’re particularly pleased that a substantial portion of the settlement is going towards furthering miner safety, which has always been Alpha’s guiding principle.”
U.S. Secretary of Labor Hilda L. Solis today also issued a statement Tuesday in response to the settlement. “I’m encouraged that Alpha is making investments in mine safety and research in response to the Upper Big Branch tragedy,” she said. “They are sorely needed. Alpha has a duty to change a troubling management culture at UBB that placed profits over people. New equipment and new facilities that value the safety of every miner are important first steps.”
While noting that no amount of restitution or penalties can bring back the 29 miners, “it’s important that Alpha do right by the families whose lives were forever changed by this preventable tragedy.”
Solis made clear that her department will continue to cooperate with the Department of Justice to address individual criminal wrongdoing uncovered by ongoing federal investigations. “Anyone determined to have violated a criminal statute in connection with Upper Big Branch should be brought to justice,” she said.
Cecil E. Roberts, president of the United Mine Workers of America, also weighed in on the settlement with a statement posted to the union’s website: “Since the government is stressing that it is not waiving its right to pursue any individuals who worked for Performance Coal or Massey, we remain hopeful that responsibility will be placed where it belongs; on upper-level management at Massey who created the safety-last culture at that company. We firmly believe the evidence is there for such criminal prosecution Until someone goes to jail, there will be no justice done here.”
In another related development Tuesday, the U.S. Mine Safety and Health Administration released the results of its investigation into the Upper Big Branch blast. It said the accident was caused by a massive coal dust explosion that could have been prevented. (See related story on http://www.virginiabusiness.com)