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Posts tagged ‘west virginia’

Criminal consequences

April 8th, 2016

As Blankenship plans an appeal, other miners in the U.S. and Canada fare worse

by Greg Klein

One year in prison and another on supervised release—six days apart from each other two American courts handed two former mining executives identical jail time. One ex-boss was implicated in polluting a river, the other in 29 mining deaths.

The latter, former Massey Energy CEO Don Blankenship, also got a $250,000 fine. The sentence came almost exactly six years after the underground explosion at West Virginia’s Upper Big Branch coal mine operated by a Massey subsidiary.

As Blankenship plans an appeal, other miners in the U.S. and Canada fare worse

Widespread outrage greeted the sentence but the judge—a coal miner’s daughter—gave Blankenship the maximum penalty allowed for a misdemeanor of conspiring to violate safety regulations. In December a jury acquitted him of felony charges of securities fraud, lying to the U.S. Securities and Exchange Commission, and conspiring to impede mine safety officials. Convictions could have brought him 31 years in prison.

In the past Blankenship reportedly donated millions to friendly politicians and judges including, Bloomberg reports, $3 million to support a West Virginia Supreme Court of Appeals judge “who helped overturn a $50-million jury award against some of Massey’s units.”

John Grisham cited Blankenship as the novelist’s inspiration for The Appeal, depicting a ruthless Wall Street billionaire and his bought-and-paid-for Supreme Court judge. Grisham later wrote Gray Mountain, a fictional indictment of the Appalachian coal industry.

Alpha Natural Resources took out Massey in 2011 for $7.1 billion. Alpha eventually paid about $209 million for fines, restitution and mine safety improvements. The company also settled a securities class action suit for $265 million, as well as settling undisclosed amounts with 29 families.

Other former Upper Big Branch staff convicted after the disaster include superintendent Gary May, who got 21 months in prison, security chief Hughie Elbert Stover, who got three years, and Massey executive David Hughart, who got 42 months.

According to the United Mine Workers of America, 52 people died on Massey property under Blankenship’s reign. Still maintaining his innocence on the misdemeanor, Blankenship intends to appeal.

The week before his sentence, a federal judge in Alaska gave Canadian James Slade one year in prison and another on supervised release for criminal violations of the U.S. Clean Water Act, the Alaska Dispatch News reported.

Prosecutors described Slade as the senior on-site executive of XS Platinum during the 2010 and 2011 mining seasons when salmon-spawning streams “turned muddy brown with waste water,” according to an earlier ADN story.

The company was extracting platinum from tailings on a former mine site near the Bering Sea coast of southwestern Alaska. Slade argued that his Australian supervisors refused his request to provide equipment that would have stopped the discharge.

But the ADN quoted the judge saying Slade “really had a choice, and when it became clear the two Australians were adamant about making as much money as they could and to heck with any pollution control equipment, he could have walked away from this job.”

Two Americans face sentencing after pleading guilty to related charges. Prosecutors declined to extradite the Australians, Bruce Butcher and Mark Balfour.

The British Columbia legislature has amendments pending that could impose $1 million in fines and three years in prison for Mining Act violations. Triggered by the 2014 Mount Polley tailings dam collapse, the new regs strengthen penalties currently capped at $100,000 and one year. But following a 2015 Vancouver Sun investigation, the paper reported that “no fines had been levied in the courts under the Mines Act since 1989.”

Notwithstanding the lack of Bre-X convictions, Canada might do more to deter fraud than other mining-related offences. In 2013 the Ontario Securities Commission slapped geologist Bernard Boily with a $750,000 fine and $50,000 costs for fraudulent assays that brought a class action suit against his employer. The previous year geologist John Gregory Paterson got six years for a nearly four-year-long assay-faking scam.

October 15th, 2015

Court hears former Massey Energy CEO’s phone calls preceding Upper Big Branch mine explosion Stockhouse
The secrets of junior mining private equity risk managers Streetwise Reports
Mining for cosmetics: Mineralogy and the ancient art of looking good Geology for Investors
TiO2 World Summit 2015: “Suppliers listen but they don’t hear” Industrial Minerals
Goldman Sachs still bullish on China, despite slashing target NAI 500
The world’s 10 most competitive countries GoldSeek
When stock traders become market cheerleaders Equities Canada

October 14th, 2015

Court hears former Massey Energy CEO’s phone calls preceding Upper Big Branch mine explosion Stockhouse
The secrets of junior mining private equity risk managers Streetwise Reports
Mining for cosmetics: Mineralogy and the ancient art of looking good Geology for Investors
TiO2 World Summit 2015: “Suppliers listen but they don’t hear” Industrial Minerals
Goldman Sachs still bullish on China, despite slashing target NAI 500
The world’s 10 most competitive countries GoldSeek
When stock traders become market cheerleaders Equities Canada

John Grisham’s Gray Mountain castigates the Appalachian coal industry

December 16th, 2014

…Read more

Pity poor Appalachia

November 21st, 2014

John Grisham’s Gray Mountain depicts a country corrupted by Big Coal

by Greg Klein

Just as a former big boss of Big Coal faces criminal prosecution following the death of 29 Appalachian miners, a best-selling novel castigates the industry for its devastation of that region. On November 20 former Massey Energy CEO Don Blankenship pleaded not guilty to four charges resulting from the 2010 Upper Big Branch mine disaster in West Virginia. John Grisham’s 27th novel, Gray Mountain, portrays an industry that ruthlessly destroyed the environment as well as the health of workers, their families and anyone else living there, with the help of politicians, judges, regulators and even goon squads, both civilian and FBI.

The charges against Blankenship could almost come from Grisham’s book. Three other former Massey executives have already been convicted of criminal offences involving Upper Big Branch. Blankenship’s victory in a previous legal battle has been said to have provoked Grisham into writing The Appeal, an indictment of the American electoral and judicial systems.

John Grisham’s Gray Mountain depicts a country corrupted by Big Coal

Massey Energy’s Upper Big Branch workers “were intimidated,” Forbes quoted Mike Caputo, a West Virginia legislator and VP of the United Mine Workers of America. “Records were falsified. Advanced warnings of inspections were given. Two sets of books were kept. There was a lack of enforcement. The list goes on, and on, and on. The more I read about the Upper Big Branch tragedy, this wasn’t just bad business practice. This was akin to organized crime.”

But while it was a methane gas explosion that killed the 29 underground miners, Grisham’s latest book, set in 2008 and 2009, focuses on mountain-top removal. Described as “strip mining on steroids,” the practice destroyed about 600 of the region’s mountains over 30 years, according to Grisham.

The company “literally attacks the mountain with all manner of heavy equipment,” the story’s activist lawyer Donovan Gray tells newcomer Samantha Kofer. “First it clearcuts the trees, total deforestation with no effort at saving the hardwoods. They are bulldozed away as the earth is scalped. Same for the topsoil, which is not very thick. Next comes the layer of rock, which is blasted out of the ground. The trees, topsoil and rock are often shoved into the valleys between the mountains, creating what’s known as valley fills. These wipe out vegetation, wildlife and natural streams…. If you’re downstream, you’re just screwed. As you’ll learn around here, we’re all downstream.”

Samantha, whose promising career in corporate law ended abruptly with the Lehman Brothers-induced recession, takes an unpaid internship at a Virginia legal aid clinic/social services agency. There she encounters a world of Big Coal-induced woe.

Reckless practices send boulders flying toward family homes. Contaminated drinking water turns communities into “cancer clusters.” Overloaded, speeding coal trucks in West Virginia alone kill one person a week. Excessive exposure to coal dust gives miners a wasting disease called black lung. Coal companies deprive dying workers of compensation.

Fighting back are Donovan and his lawyer aunt, Mattie Wyatt, who both had parents screwed over by coal companies.

Big Coal’s regime gets support from cosy regulators and watchdogs, elected judges who depend on campaign contributions, politicians who legislate favours for the industry, doctors who lie under oath and lawyers who cover up medical evidence. The FBI uses legal intimidation. Illegal intimidation comes from the companies’ armed thugs who, it’s suggested, will murder their opponents.

Lowest of the low is Krull Mining, “a company with the worst safety record in the history of U.S. coal production and an owner who was reputed to be one of the deadliest Russian gangsters in Putin’s frat pack.”

Denied benefits for over a decade, one dying miner says, “They cheated, they won, and they’ll do it again because they write the rules…. They got the money, the power, the doctors, and I guess the judges. Some system.”

Of course despair doesn’t sell books. So Grisham, a one-time Mississippi lawyer, has Donovan, Mattie and eventually Samantha launching heroic counterattacks.

Coal’s controversy divides the people of the region, Grisham writes. A bumper sticker battle features opposing slogans like “Save the Mountains” and “Like Electricity? Love Coal.”

Coal was the fabric of life in these parts, but the strip mining had divided the people.

“Coal was the fabric of life in these parts, but the strip mining had divided the people,” Samantha reflects. “According to her Internet research, its opponents argued that it destroyed jobs, and they had the numbers to support them. Eighty thousand miners now, almost all non-union and half working in surface mines. Decades earlier, long before they began blasting tops off mountains, there were almost a million miners.”

Something to keep in mind, though: If Grisham’s portrayal is fair, and if these people have their facts right, the Appalachian and British Columbian coal industries are poles apart.

What both areas now share is devastation by coal prices, less than half what they were three years ago. Mines are shutting down, throwing people out of work. In a strategy that parallels Down Under iron production, Australia has increased its low-cost coal output, further damaging the North American industry.

Yet the Age of Coal persists, despite petroleum and uranium. According to the World Coal Association, the fuel “provides 30.1% of global primary energy needs and generates over 40% of the world’s electricity. It is also used in the production of over 70% of the world’s steel.” Twenty-year forecasts from the Coal Association of Canada call for a 50% increase in metallurgical coal demand, with demand for thermal coal more than doubling.

One wonders if Blankenship will watch that happen from a prison cell.

B.C.’s longwall controversy

May 2nd, 2014

HD Mining says it will hire Canadians after all—if they want the jobs

by Greg Klein

Has there been a change of plans? Or was it a misunderstanding all along?

A veteran politician now working for HD Mining International says the company intends to hire and train Canadian longwall miners for what will be, should its proposed coal mine go into production, an English-speaking operation. He wonders, however, how many Canadians would be interested.

That qualification notwithstanding, his statements seem to differ substantially from the company’s original position, which ignited a controversy beginning in October 2012.

Saying too few Canadians had longwall mining experience, HD Mining received federal government approval to import 201 Chinese miners. The plan, as reported by media and the company itself, was to staff underground operations at its proposed Murray River mine in northeastern British Columbia with Mandarin-speaking Chinese workers for 10 years. The company, owned by Mandarin-speaking Chinese, insisted that only Mandarin-speaking Chinese knew its longwall system.

HD Mining says it will hire Canadians after all—if they want the jobs

A longwall shearer with cutting drums and
movable hydraulic roof supports called shields.

But Blair Lekstrom, an adviser to HD Mining chairperson Penggui Yan, says the company’s intentions have been misunderstood.

The project’s underground staff now consists of 51 Chinese recruited under Canada’s temporary foreign worker (TFW) program. They’re currently building a decline to conduct a bulk sample that will take about 18 months to complete, Lekstrom tells ResourceClips.com. Should the company go into commercial production, “we’ve made a commitment to train—and we’re in discussions with Northern Lights College—Canadians who want to do this work.” He says the current crew was granted TFW status only to conduct the “highly specialized” bulk sample.

“Chairman Yan has said we will train as many Canadians who want to work in our mine, but first we have to prove there is a mine.”

In November 2012, after about six weeks of critical publicity, the company signed a memorandum of understanding with Northern Lights College in the town of Tumbler Ridge to develop a longwall training program. Lekstrom says the curriculum would be developed following a decision to operate a mine.

Several American operations use longwall mining. But the companies themselves provide specialized training, according to Marlon Whoolery, training director at the Mining Technology and Training Center, which has campuses in Pennsylvania and West Virginia. “I don’t know of any training facility that trains specifically to work on the longwall because there’s various types of longwall machines, various shields, panels, shears, different stage loaders, different tailgates. Most training centres prepare a miner to go to work at the mine then the coal company trains them to the longwall system they have.”

He says U.S. federal law requires a minimum of 40 hours’ training before a novice can work underground, while some states require longer periods. The length of time to become a certified miner also varies from one state to another. West Virginia requires six months of experience while Pennsylvania requires a year.

During that time, specialized training “could be a matter of weeks or months to run a particular portion of the longwall,” Whoolery adds. “To be the shear operator in Pennsylvania you have to have machine operator’s papers in the state and it takes a year underground before you can apply for those.”

Whoolery doesn’t know of any American parallels to the HD Mining controversy. He says Massey Energy threatened to import Mexican workers years ago. The company, associated with the 2010 Upper Big Branch mine disaster that killed 29 people, was later bought out by Alpha Natural Resources NYE:ANR.

“I don’t believe there’s any mine in this country that brings miners in from somewhere else. I’m not saying there’s not mines, especially out west, that may have immigrants that are in this country illegally but I don’t know of any mine that solely operates with a workforce that they brought from another country.”

But Lekstrom insists that never was HD Mining’s intention. “Our goal is to hire and train Canadian workers that will work there and English will be the prevailing language.” Mandarin will “absolutely not” be the working language, he emphasizes.

I talk to a lot of people up here and a lot of my friends, and not many of them seem anxious about thinking underground mining might be in their future.—Blair Lekstrom,
HD Mining adviser

Lekstrom maintains there’s been no change in policy. “They’ve made that commitment from the beginning.” As for impressions to the contrary, “I would say it was a misconception.”

But any “misconception” was understandable. In October 2012 Jody Shimkus, HD Mining’s VP of environmental and regulatory affairs, told ResourceClips.com the company would likely need a decade to train a Canadian underground crew. “We’ve set a target of 10 years, recognizing that there’s a lot of work that needs to be done particularly with the local community, the educational institutions and the provincial government to develop a program that transfers the skill set. If we can achieve that target earlier, that would be great.”

Lekstrom, a former B.C. mines minister and mayor of Dawson Creek, suggests there’s a discriminatory aspect to the controversy. “Because [the TFWs] are Chinese they seem to be looked at different than the Australians, many who are over here working in mines.” He says an Anglo American project, also in the Peace River region, employs Australian TFWs. A ResourceClips.com inquiry to Anglo American’s Vancouver branch was referred to the company’s Brisbane office too late for a response by press time.

Murray River benefits Canadians, Lekstrom says. “We have spent to date about $90 million. The vast majority of that is on Canadian content. Most of the work that has been done to date has been done by Canadian workers—ground service prep whether it be fuel services, road services, hauling and trucking, drilling and blasting, surveying, the list is long.”

His remarks follow months of controversy over alleged abuse of Canada’s TFW program by companies importing staff ranging from fast food workers to helicopter pilots. Then, last month, Walter Energy NYE:WLT announced 695 layoffs for two open pit mines in the same region as Murray River. A week later Teck Resources TCK.A announced another 80 layoffs for the region, as the company postponed the restart of its Quintette open pit operations.

Still, Lekstrom wonders how many Canadians want underground jobs. “I talk to a lot of people up here and a lot of my friends, and not many of them seem anxious about thinking underground mining might be in their future. We’ll see.”

Canada’s Minister of Employment and Social Development Jason Kenney has announced plans to reform the TFW program. An e-mail from his department didn’t answer questions from ResourceClips.com about how the reforms might affect HD Mining’s 201 approved applications.

May 8, 2014, update: Details about temporary foreign workers in Canadian mines remain elusive.

Former Massey coal executive sentenced to three years in prison for endangering miners’ lives

September 11th, 2013

by Ana Komnenic | September 11, 2013 | Reprinted by permission of Mining.com

A former Massey Energy coal executive has been sentenced to three and a half years in prison for his involvement in a corruption scandal that shed light on the deaths of dozens of coal miners in 2010.

Former Massey coal executive sentenced to three years in prison for endangering miners’ lives

Don Blankenship, former CEO of Massey Energy, speaking at the Friends of America
Labor Day rally in 2009.

David Hughart, 54, admitted in February that he conspired with other workers to help warn miners of upcoming surprise safety inspections, the Wall Street Journal reports.

Although Hughart never worked at the site where an explosion killed 30 people several years ago, his cooperation with the criminal investigation revealed scheming within the company which resulted in lax safety measures and ultimately the country’s worst coal mining disaster in 40 years.

The incident occurred at the company’s Upper Big Branch mine in West Virginia. Hughart was president of Massey’s subsidiary White Buck Coal, although he left the company several days before the explosion.

Federal regulators say the mines ignored even basic safety practices such as preventing the build-up of coal dust.

Of the three Massey managers convicted in the incident, Hughart’s sentence is the longest. A former security chief at Upper Big Branch was given three years and a superintendent 21 months.

During the trial Hughart implicated former Massey CEO Don Blankenship. The ex-CEO denies any involvement and has not been charged.

Since the explosion Massey has changed ownership and management. Alpha Natural Resources NYE:ANR bought the miner in June 2011 for $7.1 billion.

According to the U.S. Bureau of Labor Statistics, fatal injuries in coal mining increased slightly in 2012, with deaths in the private mining sector overall reaching their highest levels since 2007.

The Upper Big Branch explosion led U.S. regulators to tighten coal mine safety rules in 2012.

Reprinted by permission of Mining.com