West Virginia Disaster to Cost Massey More than 2009 Earnings

21 April 2010 (Last Updated April 21st, 2010 18:30)

Massey Energy, the owner of the West Virginia coal mine where 29 people were killed in a mine blast this month, said the accident will cost the company about $212m, more than twice its 2009 earnings. The costs for compensation for the families of miners, rescue efforts and legal contingen

Massey Energy, the owner of the West Virginia coal mine where 29 people were killed in a mine blast this month, said the accident will cost the company about $212m, more than twice its 2009 earnings.

The costs for compensation for the families of miners, rescue efforts and legal contingencies will be between $80m to $150m, while another $62m will go towards the damaged equipment, development and mineral rights, the company said in its first-quarter report.

Operations at Massey’s Upper Big Branch mine have been shut down indefinitely due to on-going investigations following the 5 April accident, the worst US mining disaster in 40 years.

The company expected to produce 1.6 million tons of metallurgical coal from the mine this year.

Massey posted a 23% drop in first-quarter profit attributed to lower production due to inclement weather and higher costs.

The company’s net income for the quarter dropped to $33.6m from $43.4m a year earlier, while revenue fell 10% to $688.6m from $768.1m.