Massey Responds To Today's Senate Hearings

JULIAN, W.Va., April 27 /PRNewswire-FirstCall/ -- Massey Energy Company (NYSE: MEE) responded today to comments made during the U.S. Senate Committee on Health, Education, Labor and Pensions hearing.  

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Massey Energy is disappointed that the Senate hearings today degenerated into political grandstanding. Unfortunately, all the sound bites in the world will not improve the safety of a single miner in America.

In 2009, MSHA awarded Massey Energy three Sentinels of Safety Awards -- the most ever received by a company in a single year, and evidence of Massey Energy's commitment to safety.  At the time of the awards presentation, Joe Main stated that the winners, including Massey, "are leading by example, and they are leading the way to a safer mining industry.  Recognizing these operations for outstanding safety programs shows the rest of the industry that it is possible to run mining operations safely every day of the year."  Now, suddenly, MSHA is characterizing Massey as a "catch-me-if-you-can" company.

Many of the statements made in MSHA's written testimony today are simply untrue.  The following are but a few examples:

• MSHA's testimony paints Massey as a renegade operator seeking only to evade the inspectors.  Yet Massey consistently has an accident record that is 33% superior to the average underground mine. 

• MSHA referenced a year-long effort to "force" Massey Energy to comply and turn around its record.  Their testimony failed, however, to mention that the mine, from November 1 forward, had turned around its compliance record and greatly improved its safety record, after Massey assigned two safety professionals to work full time in the mine.  From November 1 through April 4, 2010 the rate of D Orders issued at UBB decreased 80% from the previous seven months. 

• From January 1 through April 4, there were zero lost-time accidents at UBB.  MSHA held its quarterly close-out meeting with UBB management on March 31, 2010 and determined that there were no major issues at UBB and the mine was in good condition.

• MSHA states that appealing violations is an attempt to game the system.  Nothing could be further from the truth.   MSHA discontinued the conferencing system, which prevented many citations from being contested, at the same time that it decided to view the same violations in a much harsher light.

In 2006, according to MSHA records, MSHA assessed violations against the coal industry totaling $35.1 million.  By 2008, this had grown to $194.2 million.  The fines levied increased 5.5 times.  With the number of violations much higher and the fines per violation much higher, it is not surprising that the number of contests increased.

We agree with MSHA that the violation system should be made more objective and is in need of reform.  Currently, whether a violation is a fine of several thousand dollars or several tens of thousands of dollars depends on the subjective judgment of the inspector; there is no standard method.  These judgments are often the basis of the appeals, and companies have no other avenue to contest these judgments and present their side of the story.

Without the contest system that was in place previously, and the due process checks that it provided, MSHA becomes both policeman and judge.  The extraordinary backlog of appeals is a direct result of MSHA's new processes and the abandonment of a system which had worked well for 30 years.

Massey Energy Company, headquartered in Richmond, Virginia, with operations in West Virginia, Kentucky and Virginia, is the largest coal producer in Central Appalachia and is included in the S&P 500 Index.

SOURCE Massey Energy Company