U.S. Blamed by Massey for Mine Disruption

Added by James Morley on October 29, 2010

Massey Energy Co. reported on Wednesday that coal production was a quarter million tons short, because of mine safety enforcement and inspections, as production operations were disrupted after an explosion in which 29 miners lost their lives.

An investigation in April, that took place in West Virginia at Massey’s Upper Big Branch (UBB) mine, showed that the explosion was caused by methane gas, not by the ignition of coal dust, said Chairman and Chief Executive Officer Don Blankenship.

After a conference with an analyst from Wall Street, Blankenship said that the board considers „strategic options” confirming a newspaper report.

Productivity in the third quarter was slowed by the approval process for ventilation changes and by the loss of 450 shifts due to regulatory issues. The tragedy at UBB also affected the production and caused Massey’s wider-than-expected third-quarter loss.

Baxter Phillips, Massey’s president, stated: “Specifically, increased inspection activity and more stringent enforcement actions by the U.S. MSHA (Mine Safety and Health Administration) led to the disruption of operations and lost shifts.”

Massey’s production came up 230,000 tons short of plan, and also received notices due to safety violations because of the more-than-accepted flammable coal dust.

Blankenship said “We are certain that methane was the fuel for the explosion, we do not believe that coal dust was a meaningful factor.”

The board of directors is trying to optimize shareholders value, while selling the company was not mentioned by CEO Blankenship. The Management team is conducting an annual review of strategic options.