Coal Age

NOV 2014

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A federal grand jury has returned a four-count indictment against former Massey Energy Chief Executive Officer Don Blankenship, stemming from its investigation of the April 2010 explosion at the Upper Big Branch operation in West Virginia, which could result in more than 30 years in prison for the former executive. United States Attorney for the Southern District of West Virginia Booth Goodwin confirmed November 13 that Blankenship has been charged with four criminal offenses including conspiracy to violate mandatory federal mine safety and health standards, conspiracy to impede federal mine safety officials, making false statements to the United States Securities and Exchange Commission (SEC), and securities fraud. The 43-page indictment, which resulted from the November 12 grand jury session and filed in Charleston the following day, alleges that the CEO conspired to commit and cause routine, willful viola- tions of mandatory federal mine safety and health standards at Massey Energy's Upper Big Branch operation in Raleigh County from about January 1, 2008, through about April 9, 2010. During that same timeframe, it also alleges Blankenship was part of a conspiracy to impede and hinder federal mine safety officials from carrying out their duties at Upper Big Branch by providing advance warning of federal mine safety inspection activities, allowing the com- pany's underground operations to conceal safety violations they rou- tinely committed. Third, the indictment claims that, after the UBB explosion on April 5, 2010, that killed 29 miners, Blankenship made and caused to be made false statements and representations to the SEC concern- ing the miner's safety practices up until the day of the blast. Finally, the indictment alleges that, after the explosion, Blankenship made and caused to be made materially false state- ments and representations, as well as materially misleading omis- sions, in connection with the purchase and sale of Massey Energy stock. Combined, the four counts carry a penalty of 31 years in prison. Blankenship's attorney William W. Taylor was widely quoted in the business press saying that his client was innocent and the indictment was politically motivated. "Don Blankenship has been a tireless advocate for mine safety," Taylor said. "His outspoken criti- cism of powerful bureaucrats has earned this indictment. He will not yield to their effort to silence him. He will not be intimidated." Taylor said they would fight the charges and Blankenship will be acquitted. The FBI and the United States Department of Labor's Office of Inspector General are in charge of the investigation. U.S. Attorney Booth Goodwin, Counsel to the U.S. Attorney Steven Ruby, and Assistant U.S. Attorney Gabriele Wohl are handling the prosecution. Goodwin's office made no further comment about the indictment. Westmoreland Coal Will Buy Oxford Resource Partners Westmoreland Coal Co. is poised to acquire majority ownership in Oxford Resources Partners by the end of 2014 if Oxford's common unitholders agree, with a vote expected in December, giving Denver, Colorado-based Westmoreland entry to the eastern U.S. coalfields. Charles Ungurean, president and CEO of Columbus, Ohio- based Oxford, told analysts during an October 30 conference call to discuss third-quarter earnings that his company has been pur- suing various strategic alternatives since early 2012. The proposed n e w s 4 www.coalage.com November 2014 Embattled former Massey Energy CEO Don Blankenship faces charges related to the 2010 Upper Big Branch explosion. (Photo credit: Associated Press) Ex-Massey CEO Indicted B R E A K I N G N E W S More Jobs Lost in the Mountain State Two more mines have announced plans to close in West Virginia. Hendricks Coal confirmed 90 of its workers will be furloughed from three of its mines as well as a preparation facility in Mingo County. According to a Worker Adjustment and Retraining Notification Act (WARN) notice issued by Hendricks and Glen Alum Operations LLC on November 3 with state officials, those locations impacted include the No. 1, No. 5 and No. 6 deep mines and the associated preparation plant. The WARN notice did not indicate the production plans for the mines, and projected a December 1 layoff date for the group. Alpha Natural Resources has cut nearly all of its remaining work- force at the Brooks Run South Cucumber operation in southern West Virginia as it prepares to permanently idle the underground operation. Spokesman Steve Hawkins told Coal Age that there are 17 individuals who will remain at the McDowell County mine to remove equipment and officially close its doors. The company, which cited an oversupply of low-volatile metallurgical coal and soft prices for the idling, previ- ously cut 23 miners from the Cucumber payroll in July. Annual produc- tion at the mine was 400,000 tons in 2010; year-to-date 2014, the operation has produced 190,000 tons. Hawkins said all other Brooks Run South Mining operations at the complex near Welch are still active and are not impacted by the idling and furloughs.

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