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Innovation

Alpha pays $209M to settle coal mining disaster, but it's not over yet

Alpha Natural Resources, the new owner of a West Virginia mine where 29 men died in an explosion, will pay a record $209 million. But that's not the most important detail.
Written by Kirsten Korosec, Contributor on

Alpha Natural Resources, the new owner of a West Virginia mine where 29 men died in the worst coalfield accident since the 1970s, will pay a record $209 million in fines, safety improvements and victim restitution. It's the largest settlement ever in a criminal investigation in mining accident. But that's not the most important detail.

Before I launch into why this deal is groundbreaking, readers might wonder why a story on a coal mining settlement is even on SmartPlanet, a site that typically focuses on innovation and technology within the energy industry and other sectors? In short: Like it or not, coal is still a major source of energy -- as well as the key ingredient in steel, when it's metallurgical coal -- and a huge global industry.

The Upper Big Branch mine, which exploded in April 5, 2010, was owned at the time by Massey Energy, a coal mining company with a spotty safety record and a long list of citations that was led by its pugnacious and political CEO Don Blankenship. Alpha acquired Massey in June 2011.

As the new owner, Alpha reached an agreement to pay $46.5 million in criminal restitution to the miners' families;spend $80 million over the next two years to fund mine safety upgrades across all of its underground U.S. mines; establish a $48 million trust to fund research and development projects aimed to improve health and safety; and pay nearly $35 million to resolve in outstanding citations and penalties related federal mine safety violations, the Associated Press reported this morning. It's important to note that this $35 million covers all citations against Massey's former mines, including $10.8 million in violations that the U.S. Mine Safety and Health Administration will announce in today's investigative report. This means the 1,496 cases pending against Massey before the Federal Mine Safety and Health Review Commission have now been settled, Ellen Smith from Mine Safety and Health news reported.

The most important detail: this is a non-prosecution agreement. Which means former Massey employees, executives or board members could still be charged with crimes. As Smith and Ken Ward over at Charleston Gazette both noted, this is unlike previous government deals with Massey. Back in December 2008, then-U.S. Attorney Charles Miller settled civil and criminal charges stemming from the January 2006 Aracoma Alma Mine fire, which killed two workers, and included an unusual promise not to prosecute any officers of employees of Massey.

The victim restitution amounts to $1.5 million for the families of the dead miners and two workers who survived the explosion. Back in April, Massey offered families $3 million apiece.

Families that accepted the Massey's offer were barred suing the company over the accident. A few months earlier, Blankenship, often criticized for putting profits over safety, received a $12 million retirement package that included a secretary, continued use of his current office for another three years, a monthly $5,000 retainer fee, title to a 1965 Blue Chevrolet truck and access to documents in possession of Massey necessary to defend himself in litigation or investigations arising out of his employment.

According to the Associated Press, 18 families of deceased miners have filed wrongful death lawsuits and eight of those have already settled with Massey.

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This post was originally published on Smartplanet.com

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