CHARLESTON, W.Va. -- Massey Energy set aside cash "in the upper range" to cover potential lawsuit costs and possible government fines related to the Upper Big Branch Mine Disaster, company officials say.
Massey has already put the potential costs of the April 5 explosion at nearly $129 million, and CEO Don Blankenship was quizzed Wednesday by industry stock analysts about whether the tab might go higher.
David Khani, an energy analyst with the investment bank FBR Capital Markets, wondered during a Tuesday conference call if the disaster might end up costing Massey $150 million or $200 million.
"If we wake up and the $129 million number ends up being a much bigger number ... a lot of the investors we've spoken to, that's one of the number one fears in owning your stock," Khani, told Blankenship.
Blankenship assured Khani that Massey experts have worked hard to come up with an accurate number that accounts for all possibilities, including any adverse decisions in lawsuits or hefty fines from state or federal regulators.
"We've put in numbers that are at the upper range of anything we've ever experienced," Blankenship said.
Two years ago, Massey's Aracoma Coal Co. subsidiary agreed to pay a $2.5 million criminal fine and $1.7 million in civil penalties in the January 2006 fire that killed two workers. The $4.2 million total was believed to be the largest ever in a coal-mining death case. Massey also settled a wrongful death case brought by the widows of miners Don Bragg and Ellery Hatfield, but the amount of that settlement has not been made public.