Massey Energy


Massey Energy Company was a coal extractor in the United States with substantial operations in West Virginia, Kentucky and Virginia. By revenue, it was the fourth largest producer of coal in the United States and the largest coal producer in Central Appalachia. By coal production weight, it was the sixth largest producer of coal in the United States.
Massey's mines yielded around 40 million tons of coal annually. The company controlled 2.3 billion tons of proven and probable coal reserves in Southern West Virginia, Eastern Kentucky, Southwest Virginia and Tennessee or about a third of all Central Appalachian reserves. It employed approximately 5,850 people, and operated 35 underground mines and 12 surface mines.
Massey Energy owned and operated Upper Big Branch Mine where 29 miners were killed in April 2010. The Mine Safety and Health Administration found that the company's culture of favoring production over safety contributed to flagrant safety violations that caused the coal dust explosion. On December 6, 2011 the Mine Safety and Health Administration announced a $10,825,368 levy against Massey, the largest monetary penalty imposed by the agency in history.
The resulting $10.8 million in total was from 369 citations and orders. Following Alpha Natural Resources' acquisition, Alpha additionally settled Massey's potential criminal liabilities for $209 million.
In January 2011, it was announced that Massey Energy company would be bought by competitor Alpha Natural Resources for $7.1 billion. More than 99% of Massey shareholders and 98% of Alpha shareholders voted in favor of the acquisition and courts in Delaware and West Virginia agreed with the shareholders' vote.

History

A.T. Massey incorporated the A.T. Massey Coal Company in 1920 as a coal brokering business in Richmond, Virginia, and served as the company's first president. A.T. Massey acquired its first mining operation in 1945 and expanded its business to include coal mining and processing. Five generations of the Massey family headed the company, including Evan Massey in 1945, William E. Massey in 1962, and E. Morgan Massey in 1972.
St. Joe Minerals acquired controlling interest in A.T. Massey in 1974. Six years later, St. Joe Minerals sold 50% of its interest in A. T. Massey to Royal Dutch Shell, forming the Massey Coal Partnership to run the company. In 1981, the Fluor Corporation acquired St. Joe Minerals. In 1984, the United Mine Workers of America went on strike against A.T. Massey, sparking a series of confrontations documented in the film Mine War on Blackberry Creek. Fluor and Royal Dutch Shell dissolved the Massey Coal Partnership in 1987, with each entity assuming ownership of half of the operations. Fluor changed the name of the operations it owned back to A. T. Massey Coal Company, initiating a period of significant growth through acquisitions.
In 1992, Don Blankenship was appointed President, Chairman and CEO of A.T. Massey Coal Company; he served as the Chairman and CEO of Massey for 18 years. Blankenship oversaw continued company growth, including several more acquisitions and the establishment of several subsidiaries.
A.T. Massey completed a reverse spin-off from Fluor Corporation in 2000 and was renamed Massey Energy Company. As of 2010, Massey Energy produced, processed, and sold bituminous coal of steam and metallurgical grades, primarily of low sulfur content, through its 22 processing and shipping centers, called "resource groups," many of which received coal from multiple coal mines.
On Dec. 31, 2010, longtime CEO Don Blankenship stepped down, and was replaced as CEO by Massey President Baxter F. Phillips Jr.

Sale of Massey to Alpha

On June 1, 2011, shareholders of Alpha Natural Resources agreed to buy Massey Energy for $7.1 billion, making it the nation's largest metallurgical coal company. Some shareholder groups had tried to block the sale claiming that Massey managers had engineered the sale of the company to protect themselves from liabilities and had arranged new management jobs with Alpha.

Board of directors

In response to a prolonged citizen campaign on the environment, on May 29, 2009 Ohio State University President E. Gordon Gee announced his resignation from the Board of Massey Energy. Gee had said he believed he could do more environmental good on the board than off it.

Location

There are 23 coal mining sites run by Massey Energy. There are 16 sites located in West Virginia, five in Kentucky, and one in Virginia. The organization's headquarters was located in Richmond, VA. Locations in West Virginia: Delbarton, Elk Run, Greun Valley, Guyandotte, Independence, Logan, County, Mammoth, Marfork, Nicholas Energy, Progress Energy, Rawl, Republic Energy, and Stirrat. Locations in Kentucky: Long Fork, Martin County, New Ridge, and Sidney. Locations in Virginia: Knox Creek.

Environmental and safety record

In January 2008, the company agreed to a $20 million settlement with the U.S. Environmental Protection Agency to resolve thousands of violations of the Clean Water Act for routinely polluting waterways in Kentucky and West Virginia with coal slurry and wastewater. Although this was the largest Clean Water Act settlement, the violations were estimated to have fines on the order of $2.4 billion.

Martin County coal slurry spill

In October 2000, a coal slurry impoundment owned by Martin County Coal Company, a Massey Energy subsidiary in Martin County, Kentucky, suddenly breached into an abandoned mine below it and released over 200 million gallons of coal slurry into two mountain streams, Coldwater Creek and Wolf Creek. The Martin County coal slurry spill was called the worst ever environmental disaster in the southeastern United States by the EPA. The spill smothered all aquatic life in the streams and left residents with contaminated drinking water. Cleanup costs for the spill were approximately $50 million.

Aracoma Alma Mine accident

On January 19, 2006, a belt line fire killed miners Don I. Bragg, 33, and Ellery Elvis Hatfield, 47, at Massey's Aracoma Alma Number 1 Mine in Logan County, West Virginia. Efforts to fight the fire were hampered by inadequate fire extinguishers, fire hose couplings which did not match the water line, and a lack of water in the lines. On December 22, 2008, Massey Energy agreed to pay $4.2 million in civil and criminal penalties for the accident. It is the largest financial settlement in the coal industry's history. The Charleston Gazette reported on January 15, 2009 that Aracoma widows Delorice Bragg and Freda Hatfield urged U.S. District Judge John T. Copenhaver to reject Massey's plea bargain and fine for the accident. Widow Bragg stated that it was clear "that Massey executives expected the Alma Mine to emphasize production over the safety of the coal miners inside."

Mine safety violations

On February 1, 2006, bulldozer operator Paul K. Moss, 58, of Sissonville, West Virginia died when his machine ruptured a natural gas line at Elk Run Coal Co.'s Black Castle surface mine. The bulldozer was immediately engulfed in flames. According to the Mine Safety and Health Administration report, operator Moss exited the cab but his body was found behind the blade. Massey Energy was fined $2.5 million after a federal judge accepted the company's guilty plea to 10 criminal charges for the fire. A U.S. District approved a plea deal despite a provision sparing Massey officials and the Richmond, Va., coal company from prosecution. The agreement also required Aracoma to pay a $1.7 million fine for civil violations found by the federal Mine Safety and Health Administration.
On October 8, 2008, Steven Cain, 32, of Comfort, West Virginia was killed at Massey Energy's Independence Coal Justice No. 1 Mine when he was crushed by a railcar. A Mine Safety and Health Administration report concludes Cain was killed because Massey managers assigned him a dangerous job, although he had “little mining experience and minimal training.”
In 2009, the federal Mine Safety and Health Administration cited Massey Energy's Upper Big Branch coal mine for 495 violations and proposed $911,802 in fines.

Upper Big Branch mine disaster

On April 5, 2010, an explosion at Massey owned Performance Coal Co. mine in Montcoal, West Virginia resulted in the deaths of 29 miners. The explosion, which has become known as the Upper Big Branch Mine disaster, is the worst mining disaster in 40 years, with a greater loss of life than in any mining accident since the 1970s. The federal Mine Safety and Health Administration released its final report on December 6, 2011, concluding that flagrant safety violations contributed to a coal dust explosion. It issued 369 citations at that time, assessing $10.8 million in penalties. Investigators also noted the historical record of safety violations at the Upper Big Branch mine, which amassed more than 1,100 violations in the past three years, many of them serious, including 50 of them in March 2010 for violations including improper ventilation of methane and poor escape routes. Federal regulators had ordered portions of the mine closed 60 times over the year preceding the explosion. It was claimed, that the FBI had launched a probe investigating the possible bribery of federal officials overseeing mining industry regulation by Massey Energy.