The Future of Massey Energy Co. Lost in Mining Tragedy
The April 2010 tragedy changes everything for Massey, but not for coal.
In April, 2010 an explosion in the Upper Big Branch mine in West Virginia resulted in the deaths of 28 miners. The mine, along with 18 other mining operations in West Virginia and Kentucky are owned by Massey Energy Co. However, at the end of January, 2011 Massey Energy had to confirm that they could no longer sustain the company. They lost money in the second and third quarters, and fourth quarter results had not yet been announced.
Alpha Natural Resources, Inc. is paying $7.1 billion in cash and stock for Massey. Even though coal is quite a valuable resource for America, it has been deemed the most politically incorrect fuel due to irrational fears about CO2 emissions. Given this climate, I marvel that Alpha would be willing to invest that much in the company. It is obvious they believe the coal market maintains it’s health. Of course, they may be thinking of China as a customer.
Civil and criminal investigations for the mining tragedy continue, but these two links will refresh your memory:
President Obama places all the blame on Massey Energy Co. The basis of the accusation is that levels of coal dust in the mine were too high. Bear in mind that the coal dust levels measured 3 weeks before the accident were fine. The data being used to support the accusation was taken after the explosion. (Consider this: Would your house be more dusty after an explosion than before?)
Final outcome of the tragedy is unknown, but the outcome of Massey Energy, Co. is final.