Alpha Natural Resources agrees to pay $209 million in UBB settlement

December 20, 2011

Alpha Natural Resources Inc. agreed to pay nearly $210 million in penalties as part of a settlement to resolve a range of civil and criminal penalties linked to the explosion at the Upper Big Branch Mine that killed 29 coal miners in 2010 as well as other liabilities it inherited when it bought Massey Energy in June. It is the largest settlement ever reached in a U.S. mining disaster.

U.S. Attorney Booth Goodwin announced the settlement on Dec. 6, calling it a “revolutionary resolution” that is the largest of a criminal investigation into a U.S. mine disaster, the Associated Press reported.

As part of the agreement, Alpha Natural Resources will not be charged with crimes but individuals still could face criminal prosecution although no criminal charges were announced.

"No individuals are off the hook," warned Goodwin, adding that prosecutors are still investigating. So far, only one person has been held accountable: Former security chief Hughie Elbert Stover was convicted last month of lying to investigators and trying to destroy mine records. He is awaiting sentencing.

Alpha acquired Massey Energy after the explosion at Upper Big Branch and assumed the civil and some criminal liability when it bought Massey Energy in June.

The agreement includes more than $46 million in criminal restitution to the miners’ families and $35 million in penalties for all Massey violations, including $11 million for Upper Big Branch. Another $128 million will fund cutting-edge mine safety upgrades.

The global settlement will resolve civil fines issued by the federal Mine Safety and Health Administration (MSHA) related to the Upper Big Branch accident, along with other cases from former Massey mines that have been pending before the Federal Mine Safety and Health Review Commission, according to the Wall Street Journal.

MSHA labeled nine of the contributing violations at the Upper Big Branch mine near Montcoal flagrant, the most serious designation. The flagrant violations include illegal warnings to miners underground that were on site and failure to conduct proper safety inspections.

"Every time Massey sent miners into the UBB Mine, Massey put those miners' lives at risk," said MSHA director Joe Main. "Massey management created a culture of fear and intimidation in their miners to hide their reckless practices. Today's report brings to light the tragic consequences of a corporate culture that values production over people."

The agency also said it will conduct an internal review of MSHA’s actions at Upper Big Branch before and after the explosion. Relatives of the victims and officials with the United Mine Workers of America have rebuked the agency for failing to use all the tools it had to shut down a mine it should have known was dangerous.

Goodwin, the federal prosecutor, noted that agreeing to the settlement “requires a recognition that there was criminal conduct at play.”

That wrongdoing includes violating federal mine safety laws, lying to investigators about health and safety issues, and obstructing federal regulators, the agreement said. The settlement allows investigators to increase their focus on the people responsible, Goodwin said, declining to comment on when any charges might be filed or against whom.

The largest civil mining fine to date was issued against Murray Energy Corp. for $1.85 million for the 2007 accident at its Crandall Canyon Mine in Utah that killed six miners and two rescue workers. In that case, the agency issued 20 violations, including nine that were “contributory.”



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