COAL BOSS QUITS

Mining CEO's Sudden Exit Follows Troubled Year
Howard Berkes, December 4, 2010 (National Public Radio)

"Eight months after a deadly explosion at a Massey Energy coal mine, CEO and board Chairman Don Blankenship suddenly surrendered control of the company…Neither he, nor the board, nor the company provided…[any real] explanation…The unexpected departure comes amid unconfirmed reports that Blankenship opposed the Massey board's consideration of a sale of the giant Appalachian coal producer…

"Blankenship, 60, spent close to three decades at Massey and served as chairman and CEO for 10 years. His tenure was marked by dramatic growth and enviable profitability. The number of employees doubled to 7,300, as did annual revenues, which rose from $1.08 billion in 2000 to $2.7 billion in 2009…Massey also gained control of vast coal reserves in Appalachia, including metallurgical coal used to manufacture steel. That coal is in high demand right now and is part of what makes the company an attractive takeover target."

Curiously, Blankenship gets a $10 million golden parachute for making this happen. (click to enlarge)

"Blankenship's reign was also marked by seemingly endless controversy, especially after the massive blast that ripped through Massey's Upper Big Branch mine in West Virginia on April 5. Twenty-nine miners died in that explosion, which ranks as the nation's worst coal mine accident in 40 years…In the wake of that disaster, Massey's stock price plummeted…left the company undervalued…[and] attractive to prospective buyers.

"…The board recently affirmed a departure package that gives Blankenship a $10 million golden parachute… [A lawyer who] represents the families of six of the victims of the Upper Big Branch tragedy…[said] the environmental and human costs blamed on Blankenship and Massey's mining practices [will never be undone]. Environmental activists say the company is responsible for the poisoning of streams and ground water and the stripping of forests and mountaintops. Other critics detail injuries and deaths at Massey mines and Blankenship's apparent obsession with coal production."

The good news: Blankenship is being moved out before he can mess up something really dangerous. (click to enlarge)

"Under Blankenship, Massey has amassed thousands of state and federal safety violations, citations and orders, and close to $13 million in fines. Since the Upper Big Branch disaster, Massey and other coal companies have faced greatly increased regulatory scrutiny. A federal criminal investigation is considering the company's possible role in the April explosion…Blankenship and the Massey board have also been the targets of shareholder lawsuits claiming the company's stock was devalued due to the alleged failure to operate Massey mines safely…

"Two weeks ago, Blankenship met with a selected group of reporters for more than two hours, trying to shift blame for the Upper Big Branch explosion away from his company and toward federal regulators…In July, at the National Press Club in Washington, Blankenship ridiculed global warming, environmental activism and federal mine safety regulation…"