The Company Behind the W. Va. Mining Accident International Coal Group owns the Sago mine where 13 miners are trapped. ICG is a relatively new company that was formed in May 2004 and acquired the assets of several bankrupt coal companies. In the months since then, U.S. officials say the number of safety violations at the company's mines has risen.

The Company Behind the W. Va. Mining Accident

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We're going to take a few minutes now to learn more about the company that owns the Sago Mine: International Coal Group, or ICJ. It's a relatively new company formed in May 2004 by a group of private investors, including the leveraged buyout king Wilbur Ross. ICG acquired the assets of several bankrupt coal companies, and in the months since then the government says that the number of safety violations at the company's mines has risen. NPR's Jim Zarroli has that story.

JIM ZARROLI reporting:

Just a few years ago the coal industry was undergoing a brutal downturn brought on by the worldwide drop in energy prices, and a lot of coal companies went out of business. But Terry Martin, an analyst at Moody's Investors Service, says that began to change in 2003 when the price of coal began to rise.

Mr. TERRY MARTIN (Analyst, Moody's Investors Service): And as it's done that, a number of companies and a lot of private equity, in particular, had bought up assets, you know, in the downturn or coming out of bankruptcy.

ZARROLI: Martin says a lot of new players have recently come into the coal industry. Many have little background in coal, but, he says, they tend to hire managers with considerable experience. United Mine Workers official Rich Eddy says many of the new players operate almost exclusively on the spot market where they hope to make a killing.

Mr. RICH EDDY (United Mine Workers): For the most part, our big operations are under contract. These small operations, they're more sort of what we call out there on the spot market. Wherever they can sell coal for the highest amount of money, that's what they're going for.

ZARROLI: ICG is one of the new players. In an industry that is otherwise consolidating rapidly, ICG remains a decidedly small player. It was formed by a group of private investors led by Wilbur Ross Jr., a billionaire New York investor who's known for buying up companies in depressed industries. ICG has rapidly bought up a handful of mines in Virginia, West Virginia, Maryland and Illinois and now employs about 2,000 people. And its entry into the business has been so swift that Rich Eddy of the United Mine Workers says many people still know little about it.

Mr. EDDY: They're new on the block. They just come into West Virginia, and they looked basically at the small, non-union operations.

ZARROLI: And among the properties ICG has purchased is the Sago Mine, where the accident took place that is now the focus of so much attention. Sago was, until recently, owned by Anchor West Virginia, which declared bankruptcy in 2002. Terry Martin of Moody's Investors Service says ICG is typical of a lot of the new players in the industry. It's trying to make a profit in a business that can be hard on investors.

Mr. MARTIN: In central Appalachia, in particular, it's an old mining area, and these mines there are--just very generally speaking, you know, they're older mines and they're deep into the mines, and they're in just more difficult areas. So just in terms of keeping production up is a constant challenge in this area.

ZARROLI: But Martin says that with energy prices so high, all coal companies are under unusual pressure right now to produce as much as possible.

Mr. MARTIN: Generally, people are looking to ramp up production to the extent possible to take advantage of the higher coal prices.

ZARROLI: One key question likely to surface in coming weeks involves ICG's safety record. According to the Labor Department's Mine Safety and Health Administration, the Sago Mine's injury rate was more than twice the national average last year. ICG officials say the company's safety record is a good one, but they say they won't engage in finger-pointing while the rescue is still going on. Jim Zarroli, NPR News, New York.

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