Alpha Natural Resources Working on $265 Million Safety Settlement

The company that bought Massey Energy disclosed it is trying to reach a tentative settlement of the securities class action brought by Massey stockholders in early 2010 alleging deficiencies in Massey's disclosures of safety information.

Alpha Natural Resources released its third quarter financial results last week, showing how it is weathering tough times for the coal industry, and included in them a statement about a possible $265 million settlement. The company bought Massey Energy after the Upper Big Branch Mine disaster, which brought a record MSHA fine against the Massey subsidiary that operated it.

Alpha NR's announcement said it is trying to reach a tentative settlement of the securities class action brought by Massey stockholders in early 2010 alleging deficiencies in Massey's disclosures of safety information.

"During the third quarter, Alpha once again demonstrated its commitment to best-in-class safety performance, with two of our operations, the Chesterfield preparation plant and the Roaring Fork No. 4 facility, receiving Sentinel of Safety awards. In addition, our Enterprise No. 9 and Sidney M3 operations have been recognized by Kentucky with Underground Safety Awards," said Kevin Crutchfield, chairman and CEO of Alpha. "I would like to personally commend our entire workforce for their constant dedication to Alpha's principles of Running Right."

"Although our third quarter results this quarter reflect the tough market environment and downtime at our Cumberland mine, we are encouraged that the metallurgical coal market appears to be gradually improving from its recent apparent low point, and domestic thermal coal inventories have trended down, planting the seeds for healthier market conditions in the future. Regardless, we are not standing still, and we continued to make significant progress this quarter enhancing our competitiveness and flexibility by managing those aspects of our business within our direct control."

Alpha recorded a net loss of $458 million during the third quarter, compared with a net loss of $46 million during the same quarter of 2012.

Total revenues in the third quarter of 2013 were $1.2 billion compared with $1.6 billion in the third quarter of 2012 and coal revenues were $1.0 billion, down from $1.5 billion. The company shipped 5.0 million tons of metallurgical coal shipments during the 2013 third quarter, slightly above the 4.9 million tons in the third quarter of 2012, but its average per ton realization on metallurgical coal shipments was $94.73, down from $129.96 in the third quarter last year.

The Mine Safety and Health Administration issued a record $10,825,368 fine following its investigation into the April 2010 explosion at the Upper Big Branch-South Mine, which was operated by Performance Coal Co., a subsidiary of Massey Energy Co., and concluded Massey's corporate culture was the root cause of the tragedy.

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