It appears that Massey Energy (MEE), the company who owns the Upper Big Branch mine in West Virginia, has a troubled past that includes multiple safety violations.
The Upper Big Branch mine is the scene where 25 miners died after an explosion earlier this week.It’s quite a tragedy and has obviously not bared well for Massey’s stock, which is down 10% this week.
According to Footnoted.org, Massey’s SEC filings paint a picture of how the company seems to be aware of the dangers associated with mining. For instance, an 8-K filed on March 24th, just a few weeks ago, takes an anti-regulatory stance saying increased mining regulation could hamper the company’s ability to perform:
“Numerous governmental permits and approvals are required for mining operations. … All requirements imposed by such authorities may be costly and time-consuming and may delay commencement or continuation of exploration or production operations. … Permits we need may involve requirements that may be changed or interpreted in a manner that restricts our ability to conduct our mining operations or to do so profitably. Future legislation and administrative regulations may increasingly emphasise the protection of the environment, health and safety and, as a consequence, our activities may be more closely regulated. “
Then there’s the graph above from ThinkProgress which shows that during 2009, the Upper Big Branch mine was an amalgamation of violations and fines. Here are some quick facts regarding that matter:
- The mine has been cited for over 3,000 violations by the Mine Safety and Health Administration (MSHA), 638 since 2009.
- Since 1995, Massey’s Upper Big Branch-South Mine has been cited for 3,007 safety violations. Massey is contesting 353 violations, and 127 are delinquent.
- Massey is contesting over a third (34.7%) of the 516 safety citations the Upper Big Branch-South Mine received in 2009, its greatest count in the last 15 years
- In March 2010, 53 new safety citations were issued for Massey’s Upper Big Branch-South Mine, including violations of its mine ventilation plan.
- Over $2.2 million in fines have been assessed against Massey’s Upper Big Branch-South Mine since 1995, with $791,327 paid. Massey is contesting $1,128,833 in fines. Massey’s delinquent fines total $246,320.
Interestingly, Massey doesn’t have business interruption insurance, which means if the mine doesn’t get up and running again soon and it can’t meet the demand for coal its customers commend, it will have to purchase coal from its competitors.
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