US Pension funds demand justice from Massey EnergyPublished by MAC on 2011-05-30
Source: New York Times, Businessweek, Reuters (2011-05-26)
Law suit seeks halt to planned merger
US coal miner, Massey Energy "recklessly ignored safety and allowed dangerous conditions to build inside a West Virginia mine until a blast last year killed 29 men in the deadliest U.S. coal accident since 1970.
That's the conclusion of an independent report released on 19 May in West Virginia.
Massey is surely the single most destructive coal mining company in the US, and currently trying to sell itself to rival miner, Alpha Resources.
Not that Alpha is much more responsible than Massey - it was fined US$4 million only last March for violating clean water regulations. See: US mountain-top removal prompts legal action
Now, some state pension funds - including New Jersey Building Laborers Statewide Pension Fund - have gone to court in an attempt to block the merger deal, in order to wring further compensation out of Massey through filing a class action suit.
The Funds claim that the transaction was priced $1.5 billion cheaper than it should have been in view of Massey's parlous safety record, and the damages it ought to pay.
According to Reuters, the law suit has revealed Massey's belief that president Obama himself was seeking to "bring down" Massey.
Why this should have any bearing on the company's appalling behaviour (rather than its paranoia) is anyone's guess.
For previous MAC story, see : Is US coal coming under control?
* If any reader, concerned about the impacts of coal miners such as Massey, is in the western USA later this week, they might be interested in joining the March to Blair Mountain.
This is promised to be "an historic march to demand an end to mountaintop removal, the strengthening of labor rights, sustainable job creation in Appalachian communities, and the preservation of Blair Mountain".
See below for further details
Mine Owner's Negligence Led to Blast, Study Finds
By Sabrina Tavernise
New York Times
20 May 2011
WASHINGTON - In the first comprehensive state report on the 2010 coal mine disaster in West Virginia, an independent team of investigators put the blame squarely on the owner of the mine, Massey Energy, concluding that it had "made life difficult" for miners who tried to address safety and built "a culture in which wrongdoing became acceptable."
The report, issued Thursday by an independent team appointed by the former West Virginia governor, Joe Manchin, and led by the former federal mine safety chief Davitt McAteer, echoed preliminary findings by federal officials that the blast could have been prevented if Massey had observed minimal safety standards.
But it was more pointed in naming Massey as the culprit, using blunt language to describe what it said was a pattern of negligence that ultimately led to the deaths of 29 miners on April 5, 2010, in what was the worst American mining disaster in 40 years.
"The story of Upper Big Branch is a cautionary tale of hubris," the report concluded. "A company that was a towering presence in the Appalachian coalfields operated its mines in a profoundly reckless manner, and 29 coal miners paid with their lives for the corporate risk-taking."
A spokesman for Virginia-based Massey was not available for comment Thursday morning. Company executives invoked their Fifth Amendment rights, and refused to be interviewed. The 120-page report chronicles the explosion, pieced together through months of interviews, documents, data and correspondence. Workers at the mine had long known the conditions were risky, and the report opens with a passage about the fear that one miner felt the day before he died in the disaster.
"Man, they got us up there mining, and we ain't got no air," the miner, Gary Wayne Quarles, told his friend Michael Ferrell, who talked to investigators. "I'm just scared to death to go to work because I'm just scared to death something bad is going to happen."
The report goes on to say that a "perfect storm" was brewing inside the mine, combining poor ventilation, equipment whose safety mechanisms were not functioning and coal dust, which, contrary to industry rules, had been allowed to accumulate, "behaving like a line of gunpowder carrying the blast forward in multiple directions."
Investigators also take issue with the conclusion offered by Massey officials - that the explosion occurred when a giant burst of methane bubbled from the ground, a natural event that would have been impossible to predict or control.
The damage inside the mine was not consistent with that theory, investigators said. Among the evidence was the bodies of the miners in the area of the main explosion: only two had methane in their lungs.
"If, as Massey investigators maintained, one million cubic feet of methane had been suddenly released, the result would have been a five million cubic foot flame going across the face and throughout the tailgate entries in both directions," the report said, referring to areas of the mine.
It added, "Evidence found during the investigation does not suggest a force of this magnitude."
Independent study faults owner in W.Va. coal blast
By Vicki Smith and Tim Huber
19 May 2011
BECKLEY, W.VA. - Massey Energy Co. recklessly ignored safety and allowed dangerous conditions to build inside a West Virginia mine until a blast last year killed 29 men in the deadliest U.S. coal accident since 1970, according to an independent report released Thursday.
The report by a former top federal mine regulator, commissioned by the state's then-governor, said Massey could have prevented the April, 5, 2010, disaster with standard safety practices, including better ventilation to reduce potentially explosive levels of gas and dust in the tunnels.
"A company that was a towering presence in the Appalachian coalfields operated its mines in a profoundly reckless manner, and 29 coal miners paid with their lives for the corporate risk-taking," the study concluded.
The study supported the federal government's theory that methane gas mixed with huge volumes of explosive coal dust turned a small fireball into a preventable earth-shattering explosion
"The disaster at Upper Big Branch was manmade and could have been prevented had Massey Energy followed basic, well-tested and historically proven safety procedures," investigators wrote.
Massey disputed the report's findings, saying its experts continue to maintain that the explosion was sparked by an uncontrollable inundation of natural gas deep inside the mine.
"Our experts feel confident that coal dust did not play an important role," Shane Harvey, Massey's general council said in a prepared statement. "Our experts continue to study the UBB explosion and our goal is to find answers and technologies that ultimately make mining safer."
Virginia-based Massey is in the process of being acquired by Alpha Natural Resources. An Alpha spokesman said the company plans to retrain Massey employees and add 270 safety positions when it takes over Massey's operations on June 1.
The report, released online at the same time it was presented privately to families of the victims, is the first of several that are expected. State and federal investigators are pursuing their own investigations, while federal prosecutors conduct a criminal investigation.
Roosevelt Lynch left the family briefing early with tears in his eyes. His father, William Roosevelt Lynch, died in the explosion. Lynch said he wanted time to digest the report, but thought investigators "did a pretty good job. I'm satisfied."
Lynch said he was not surprised by the scathing assessment of Massey.
"I'm a coal miner," he said. "I know what goes on."
The 113-page report was compiled by a team led by former federal Mine Safety and Health Administration chief J. Davitt McAteer, who was appointed by then-Gov. Joe Manchin to examine the April 5, 2010, explosion.
McAteer's report has 11 findings and 52 recommendations, ranging from better monitoring of underground conditions to subjecting companies' boards of directors to penalties if they fail to make safety a priority.
Federal officials praised the findings as vindication of their theory.
"The mine operator just miserably failed to comply with the law and put into place a number of protections," MSHA director Joe Main told The Associated Press.
The report echoes what MSHA will say when it briefs the public on June 29 on its findings, said U.S. Department of Labor solicitor Patricia Smith.
It also offers disturbing details about the conditions in 2.7 miles of active underground mining where air routinely flowed in the wrong direction, if at all. Men were regularly forced to wade through chest-deep water, and the safety inspector who was supposed to file pre-shift reports on air and methane readings did so for weeks before the blast without even turning on his gas detector.
There was so little fresh air flowing to clear away methane, coal dust and other dangerous gases that the normally chilly underground environment grew hot enough to make men sweat.
"It literally felt like you were melting," said roof bolter Michael Ellison, who had called in sick the day of the blast. His shift started at 7 a.m., he told investigators, "and by 8:30, all of us looked like we had been standing out in a rainstorm, just soaking wet."
It was, the report concludes, a mine where the crew could do nothing to save itself when the inevitable happened.
"Everything just went black. It was like sitting in the middle of a hurricane, things flying, hitting you," Tim Blake, one of two survivors, told investigators.
The other, James Woods, was so severely injured he may never be able to talk about what he endured.
Evidence suggests the crew closest to the explosion knew what was about to happen but had little time to react and no way to stop it.
At 2:59 p.m., the operator manually disconnected the cutting machine, a two-step process that investigators say shows he knew something serious was happening.
Blake, meanwhile, struggled in the darkness to save his crew, pulling Woods and seven other men from a shuttle car and putting emergency air packs on all but one, whose device was missing.
"They all had pulse," he said.
Blake checked them a few minutes later.
"Everybody had a pulse but one man."
Then he decided to leave them -- "the hardest thing I ever done" -- to get help.
On his way, he met Massey employees who had raced into the mine to help. One was an emergency medical technician, and together in darkness, they prayed.
The report reveals that 19 of the miners died of carbon monoxide poisoning, although several also suffered traumatic injuries in the blast.
Though critics often claim Massey puts production over safety, it's a charge the company vigorously denies.
But the report's narrative delivers a scathing assessment of Massey, saying deviance from the industry's accepted safety standards was the norm.
The report says the mine was a place where foremen improvised on a regular basis to give their crews enough fresh air, where anyone who dared challenge authority was threatened with firing, and where the only thing that mattered was made crystal-clear in a single practice -- calls to the surface with production reports every 30 minutes for company executives.
Although the blast has been widely viewed as a single event, the report says it was actually a chain reaction that lasted from one to three minutes, starting at 3:01 p.m. As coal dust become airborne, it provided more fuel, allowing the blast to continue propagating "like a line of gunpowder," forward in multiple directions, "obliterating everything in its path."
In January, the MSHA said it suspected the blast began with a spark from the cutting head of a mining machine, which had poorly maintained and plugged water sprayers that failed to douse the flames.
McAteer's investigators agreed.
The investigators also concluded the mine's ventilation system had been compromised, in part by flooding in tunnels leading to a fan positioned to suck air through the mine, but also by leaky airlock doors that had been propped open and other missing air controls.
Upper Big Branch was cited 64 times for ventilation violations in 2009.
Massey has spent moths blaming the federal government for the blast, claiming that changes MSHA ordered to its ventilation plan only contributed to the problems.
The independent investigators found no evidence to support those claims.
Nor did they find any records showing Massey complained to MSHA.
The mine about 50 miles south of Charleston hasn't operated since the explosion. Massey has proposed sealing the mine, but details still need to be worked out with MSHA.
Associated Press reporter Lawrence Messina contributed to this report. Huber reported from Charleston, W.Va.
Lawsuit suggests Obama secret agenda to bring down coal miner Massey Energy
By Steve James
26 May 2011
NEW YORK - Executives of Massey Energy Co (MEE.N) believed President Barack Obama had a secret agenda to bring down the coal company after 29 men were killed in an accident at one of its mines last year, a lawsuit shows.
The charge came in a class action suit by investors who seek to block Massey's pending $7 billion takeover by Alpha Natural Resources Inc (ANR.N) as they press their claims for about $1 billion in losses from alleged Massey mismanagement.
A copy of the suit, filed on Tuesday in state court in Delaware, was obtained by Reuters. Chancery Court Judge Leo Strine is scheduled to hear the investors' request to block the deal at a hearing in Wilmington on Thursday.
The suit, filed by several state pension funds, seeks an injunction to block the merger and allow claims against Massey to go ahead. Massey would cease to exist after the merger, on which shareholders of both companies are voting next week.
"We are challenging the way the (Massey) board and senior management handled oversight," Amy Miller, a co-lead counsel for the plaintiffs, told Reuters.
Last week, an independent inquiry into the April 2010 blast that killed 29 miners at Massey's Upper Big Branch coal mine in West Virginia concluded it could have been avoided and blamed it on safety failings. An inquiry by the federal Mine Safety and Health Administration (MSHA) is still pending.
In the suit unsealed in Delaware on Tuesday, the plaintiffs noted that for more than five years, "Massey has incurred record numbers of citations for serious safety hazards."
It said Don Blankenship, Massey's former chief executive, and Chairman Bobby Inman gave depositions in which they "firmly believed the company was being targeted by the government."
Inman, a former CIA deputy director, "was unequivocal in his assertions" that MSHA, unions, lawyers "and President Obama himself harbored a secret agenda to destroy Massey."
The large numbers of safety violations Massey received were proof of the conspiracy, according to the suit. Between 2005 and 2009, Massey's total safety violations increased from 4,698 to 10,653, while violations that posed a serious threat to worker safety increased from 54 to 246, the suit said.
Just 10 days after the accident -- the worst U.S. mine disaster in four decades -- Obama publicly blamed Massey.
"Safety violators like Massey have still been able to find ways to put their bottom lines before the safety of their workers, filing endless appeals instead of paying fines and fixing safety problems," the president said. Massey called Obama's remarks "regrettable."
There was no immediate comment on Wednesday from the White House, nor from Massey or Alpha Natural.
The lawsuit brought by several funds, including the New Jersey Building Laborers Statewide Pension Fund, seeks to hold Massey directors liable for the company's more than $25 million in assessed violations by MSHA.
Massey posted four consecutive quarterly losses after the accident and agreed to be sold to rival Alpha for around $7 billion. Pension funds contend the price was $1.5 billion cheaper than it should have been because of Massey's poor safety record.
On a day when all coal stocks were higher, Massey's rose 4.0 percent to $63.16 and Alpha's was 4.5 percent higher at $52.15 in afternoon trading on the New York Stock Exchange.
The case is: In re Massey Energy Co. derivative and class action litigation, 5430, Delaware Chancery Court (Wilmington).
(Additional reporting by Tom Hals in Wilmington, Editing by Gerald E. McCormick)
March to Blair Mountain
The Appalachia Rising: March on Blair Mountain and the culminating Rally and Day of Action will be June 4th to 11th in southern West Virginia's coalfields. Hundreds of people from Appalachia and across the nation will embark on an historic march to demand an end to mountaintop removal, the strengthening of labor rights, sustainable job creation in Appalachian communities, and the preservation of Blair Mountain.
The March is a peaceful, unifying event involving environmental justice organizations, union workers, scholars, artists, and other citizens and groups. The march commemorates the 90th anniversary of the Battle of Blair Mountain in 1921, when 10,000 coal miners rose against the rule of the coal operators and fought for the basic right to live and work in decent conditions.
Today, Blair Mountain, like dozens of other historic mountains throughout the region, is being threatened by mountaintop removal and it is here that a new generation of Appalachians takes a stand.
We march to preserve Blair Mountain, abolish mountaintop removal, strengthen labor rights, and an investment in sustainable job creation for all Appalachian communities.
In the spirit of the original march-which consisted of mountain peoples, African-Americans, and immigrants from all over Europe-we reach out to a diversity of groups to march in solidarity for the workers, communities and mountains of Appalachia. If you stand with us, you are one of us - a true mountaineer.