Regions Southwest Virginia

Massey report contradicts probe findings

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Two days after Richmond-based Massey Energy Co. was acquired in a $7.1 billion deal, its former chairman defied the company’s new owner, issuing a report that absolved Massey of responsibility for the worst coal mine disaster in 40 years.

An April 2010 explosion at Massey’s Upper Big Branch mine in West Virginia killed 29 miners. Massey’s yearlong investigation concluded the blast was caused by an unpreventable surge in natural gas.

The 102-page report, released June 3 by Massey’s former chairman, Adm. Bobby R. Inman, contradicts the May findings of an independent investigation by J. Davitt McAteer, a former top mining regulator. It said lax safety procedures allowed combustible coal dust to accumulate in the mine. A third probe by the federal Mine Safety and Health Administration, due June 29, was expected to agree with McAteer’s conclusions.

Massey’s new owner, Abingdon-based Alpha Natural Resources, quickly distanced itself from the coal company’s report, saying Alpha had not reviewed it nor authorized its release.

In a statement, Alpha said it had told Massey officials before the merger: “It was not appropriate to release any report purporting to contain Massey’s assessment of the cause of the Upper Big Branch explosion before Alpha had an opportunity to fully understand and assess the situation.”

Alpha said it plans to conduct its own investigation and will cooperate with federal authorities.
The merger was approved on June 1 by shareholders of both companies. The new company is the world’s third largest producer of metallurgical coal, the coal used to make steel.

The deal means Alpha will control the second-largest coal reserve in the U.S., with 5 billion tons of coal in Central and Northern Appalachia, Illinois and the Powder River Basin. The company has about 150 coal mines and 40 preparation plants and employs 14,000 people. Revenues of the combined company would have been almost $7 billion in 2010.

But Alpha also inherits Massey’s issues related to the mine disaster. Massey had reached settlements with some of the victims’ families and faced lawsuits from 13 families. The future of those lawsuits is unclear. Alpha officials have said they are planning to improve safety and environmental stewardship at the newly acquired mines.

“We will immediately begin building upon our history of successful integrations, including implementing Alpha’s unique employee-driven ‘running right’ philosophy of safety and environmental stewardship across the businesses,” Kevin Crutchfield, Alpha’s CEO said in a statement. 

“With this acquisition, Alpha is well-positioned to capitalize on strong global demand growth for both thermal and metallurgical coals, while delivering excellent quality and service to our domestic customers.”

Under terms of the deal, Massey stockholders received 1.025 shares of common stock of Alpha and $10 for each share of Massey stock they owned.

Alpha is building a new 130,000-square-foot headquarters building in Bristol

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