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Will Massey Buyout Make For Safer Mines?

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Will Massey Buyout Make For Safer Mines?

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Will Massey Buyout Make For Safer Mines?

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MICHELE NORRIS, host:

This weekend, the huge coal mining company, Massey Energy, agreed to a buyout. The deal is valued at more than $8 billion. Massey owns the Upper Big Branch Mine in West Virginia, where 29 workers died last April. The company is known for amassing thousands of safety violations and for aggressively sparring with federal regulators.

NPR's Howard Berkes has been asking this question: Will anything change under new ownership?

HOWARD BERKES: The company paying billions for Massey Energy is Virginia-based Alpha Natural Resources, which already owns underground coal mines. But it's a marriage blending two very different companies, says Meredith Bandy, the coal equity analyst at BMO Capital Markets.

Ms. MEREDITH BANDY (Coal Equity Analyst, BMO Capital Markets): Alpha's management team tends to be professional and sort of restrained towards the regulators. Massey has historically been pretty aggressive in their dealings, maybe even contentious would be the right word. And Alpha certainly is not like that. They're much more low key.

BERKES: An NPR analysis of federal mine safety records shows that Massey has a rate of safety violations that is a third higher than the rate for Alpha. And Alpha's violations rate is 20 percent lower than the national rate. Alpha also has a senior safety and production executive named Allen Dupree, who not only worked for the Mine Safety and Health Administration, but has been buddies with MSHA's mine safety chief, Kevin Stricklin. Neither would talk today about their working relationship, but some consider it a plus.

Tony Oppegard is a former MSHA official who now represents coal miners in lawsuits against mining companies.

Mr. TONY OPPEGARD (Attorney): I would hope that that would help for the two sides to be able to sit down and discuss safety problems as opposed to the way it is with Massey that when MSHA intervenes, they're butting heads with Massey because Massey wants to do it their own way.

BERKES: Still, some are suspicious about possible cozy relationships between the regulated and the regulators. That leaves Phil Smith of the United Mine Workers Union cautious but optimistic about Alpha's takeover of Massey.

Mr. PHIL SMITH (United Mine Workers Union): You know, I don't think there's any coal company that likes regulation and I don't think there's any coal company that likes the enhanced regulations that are in the hallmark for the last several years. That said, Alpha has not been out front trying to wipe out increased enforcement. And they're also not trying to run away from their record like Massey has been trying to do over the past several years.

BERKES: Massey insisted it put safety first even as it amassed one of the worst safety records in the business. In a conference call with industry analysts today, Alpha's CEO Kevin Crutchfield said this about the company's approach to safety and regulation.

Mr. KEVIN CRUTCHFIELD (CEO, Alpha Natural Resources): I think we've demonstrated through our track record that we've created a fair amount of credibility and we would expect that to continue going forward.

BERKES: The key, some say, is whether Alpha replaces Massey executives and mine managers who may have trouble adapting. Alpha wouldn't say today who would stay or leave. The acquisition must still be approved by the boards of both companies and federal securities and monopoly regulators.

Howard Berkes, NPR News.

ROBERT SIEGEL, host:

This is ALL THINGS CONSIDERED.

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