Coal co Alpha to pay $200 million over mine disaster

Reuters News
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Posted: Dec 06, 2011 12:18 PM
Coal co Alpha to pay $200 million over mine disaster

(Reuters) - Coal miner Alpha Natural Resources said on Tuesday it has agreed to pay more than $200 million to resolve civil and criminal charges linked to last year's West Virginia mine accident, in which 29 men died.

Shares in the company, which acquired the mine's owner, Massey Energy, this year, fell 3.6 percent to $24.27 in morning trading on the New York Stock Exchange.

Alpha said in a statement that it entered into agreements with the U.S. Attorney's Office for the Southern District of West Virginia and the United States Department of Justice, as well as a comprehensive settlement with the federal Mine Safety and Health Administration (MSHA).

The agreement does not resolve any individual responsibilities related to the April 5, 2010 Upper Big Branch Mine explosion but leaves open the possibility of criminal charges against former Massey Energy executives. The mine was owned at the time by Massey.

Alpha has since acquired Massey in a $7 billion deal that included assumption of liabilities for the accident -- the worst U.S. mining disaster in four decades.

Under the terms of the agreement, Alpha said it agreed to invest $80 million over the next two years in added safety measures at legacy Massey mines and Alpha mines.

It will establish a $48 million trust to fund research and development projects designed to improve mine health and safety and pay $46.5 million to families of the dead miners and two other individuals affected by the explosion. It said $16.5 million of that sum has already been paid in settlements and anticipated settlements.

Alpha also agreed to pay $34.8 million to settle outstanding safety citations, violations, and orders related to MSHA's investigation into the explosion.

MSHA's official investigation of the accident was to be released later on Tuesday.

(Reporting by Sakthi Prasad in Bangalore Steve James in New York; Editing by Gerald E. McCormick and Lisa Von Ahn)