Alpha to Pay $209M Over West Virginia Coal Mine Disaster

Coal miner Alpha Natural Resources has agreed to pay $1.5 million to each of the families of 29 miners killed in an explosion at the Upper Big Branch Mine in West Virginia last year.

The payments – part of a $209 million settlement of civil and criminal charges stemming from the April 5, 2010 accident – included a fine of $10.8 million, the biggest ever imposed by U.S. federal mine regulators.

The settlement, announced Tuesday, does not resolve questions of individual responsibility and leaves open the possibility of criminal charges against former executives of Massey Energy, which owned the mine at the time of the blast, the worst in the U.S. mining industry in four decades.

“I want to emphasize again that the investigation of individuals associated with Massey is still ongoing,” said federal prosecutor Booth Goodwin. “If anything, this resolution allows us to place a greater focus on that critical piece of our investigation.

“We’re still working hard on the investigation,” he told reporters in Charleston, West Virginia.

Shares of Alpha, which acquired Massey this year and assumed liability for the 2010 accident, fell 1.8 percent to $24.71 at mid-afternoon on the New York Stock Exchange.

Separately, the Mine Safety and Health Administration (MSHA) released its official investigation of the accident, concluding it was “entirely preventable.”

It said the blast was caused by a coal dust explosion that started when methane gas was ignited. The agency issued 12 citations for violations of the Mine Act that contributed to the explosion, and another 357 separate violations.

It also said “unlawful policies and practices implemented by Massey were the root cause of this tragedy.

“Massey promoted and enforced a workplace culture that valued production over safety, including practices calculated to allow it to conduct operations in violation of the law,” the report said.

Alpha said in a statement that under its agreement with the federal prosecutor’s office for the Southern District of West Virginia, the U.S. Department of Justice and MSHA, it will invest $80 million over the next two years in added safety measures at legacy Massey mines and Alpha mines.

It will also establish a $48 million trust to fund research and development projects designed to improve mine health and safety, and pay $46.5 million to families of the dead miners and two other individuals affected by the explosion. It said $16.5 million of that sum has already been paid in settlements and anticipated settlements.

Alpha also agreed to pay $34.8 million to settle outstanding safety citations, violations and orders related to MSHA’s investigation into the explosion.

Alpha Chief Executive Kevin Crutchfield said the settlement represents “the best path forward for everyone.”

Company spokesman Ted Pile told Reuters that so far, eight families have settled with the company and received restitution of about $1.5 million each. Three more families are in the process of settling, while the survivors of the other 18 victims are in litigation.

He said Alpha had already figured in the $46.5 million restitution amount in its financials, along with the $80 million investment in safety measures at its mines. The only new figure was the $48 million for a trust fund to research and develop improved safety measures and technology.

Massey said last year it had set aside $78 million to pay for expected litigation. Alpha acquired Massey in a $7 billion deal in June.

(Additional reporting by Sakthi Prasad in Bangalore and Steve James in New York; Editing by Gerald E. McCormick, Lisa Von Ahn, John Wallace and Richard Chang)