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Alpha tops 2011 safety fine list, report says

CHARLESTON, W.Va. -- Coal mines owned by Alpha Natural Resources were assessed more fines for federal mine safety and health violations last year than all other major publicly traded coal companies combined, according to a report from the corporate business intelligence group SNL Financial.

SNL said the finding provides "evidence that the company continues to struggle to bring former Massey Energy co. operations into compliance" with safety and health standards.

Based on an analysis of corporate financial disclosures, SNL reported that Alpha received nearly $33 million in proposed fines from the federal Mine Safety and Health Administration in 2011. That's more than the $30 million in fines assessed to 11 other major coal owners combined, the analysis found.

"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, tend to occur, and often results in more safety violations than at large-scale surface mines in the western United States," the SNL report said.

Alpha spokesman Ted Pile told SNL that "by sheer numbers, more underground mines in particular mean more inspections and more paper in aggregate."

Pile also said that Alpha's assessment figures for 2011 are "inflated" by the Upper Big Branch Mine, which drew $12.4 million in penalties in large part because of the 2010 explosion that killed 29 miners. Alpha acquired Upper Big Branch in June 2011 when it bought Massey Energy.

SNL reported that, 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, still far more than the next company on the list, CONSOL Energy, with $6.8 million in fines.

Alpha officials have argued that their "Running Right" safety program has improved conditions at the former Massey operations. CEO Kevin Crutchfield said earlier this year that in the last three months of 2011, Alpha "experienced a marked decrease in MSHA enforcement actions with MSHA orders down approximately 45 percent compared to the previous quarter."

Publicly traded companies that own coal-mining operations must report safety performance data to their shareholders, industry analysts and the U.S. Securities and Exchange Commission. Language requiring that reporting was added to the 2010 financial reform bill at the behest of Sens. Robert C. Byrd and Jay Rockefeller, D-W.Va.

Reach Ken Ward Jr. at kward@wvgazette.com or 304-348-1702.


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