Coal Tattoo

Report: Alpha tops coal industry in MSHA fines

Share This Article

This just in from SNL Financial’s website:

Coal mines operated by Alpha Natural Resources Inc. were assessed more proposed fines for federal safety and health violations in 2011 than all major public coal companies combined, evidence that the company continues to struggle to bring former Massey Energy Co. operations into compliance.

An SNL Energy analysis of annual safety and health data included in companies’ Form 10-K SEC filings shows Alpha received nearly $33 million in proposed fines from the U.S. Mine Safety and Health Administration, more than any other coal producer by a wide margin. In fairness, Alpha now operates the most coal mines of any U.S. public coal producer, and many of those operations are underground mines in Central Appalachia, where more complex mining, with larger workforces, tends to occur and often results in more safety violations than at large-scale surface mines in the western United States.

Alpha states in its Form 10-K that it has 145 mines and 35 coal preparation facilities, and added that “citations and compliance metrics … vary, due to the size and type of the operation.” The company also said in the filing, “We endeavor to conduct our mining and other operations in compliance with all applicable federal, state and local laws and regulations. However, violations occur from time to time”

SNL posted this chart:

The story continued:

Alpha spokesman Ted Pile emphasized that “by sheer numbers, more underground mines in particular mean more inspections and more paper in aggregate.” He also noted that Alpha’s assessment figures for 2011 are “inflated” by the circumstances at its Upper Big Branch mine in West Virginia. Approximately $12.4 million of the fines assessed to Alpha in 2011 were at Upper Big Branch, where a deadly explosion in 2010 killed 29 miners and was subject of several investigations that blamed Massey for poor safety practices.

And:

Pile said that accident rates at Massey operations have improved considerably since the acquisition and the fourth quarter showed marked improvement in the issuance of elevated enforcement actions. “We track our violations per inspector shift as do many companies, and we believe our performance is comparable to our competitors,” he said. “That doesn’t mean we aren’t striving to lower the rate, and in the months after we completed the acquisition we saw meaningful progress in many of the safety indices we track.”

However, even excluding the Upper Big Branch assessments, Alpha racked up nearly as many proposed fines in 2011 as Alpha and Massey did combined in 2010. Excluding Upper Big Branch, Alpha was assessed $20.3 million in fines in 2011, compared to $20.7 million for Alpha and Massey combined in 2010.