FEBRUARY 2008

Massey Energy pays largest civil penalty ever for water permit violations

Massey Energy Company, Inc. has agreed to pay a $20 million civil penalty in a corporate-wide settlement to resolve Clean Water Act violations at coal mines in West Virginia and Kentucky, the Justice Department and Environmental Protection Agency (EPA) announced. This is the largest civil penalty in EPA’s history levied against a company for wastewater discharge permit violations.

As part of the settlement, Massey, the fourth largest coal company in the United States, has agreed to take measures at all of its facilities that will prevent an estimated 380 million pounds of sediment and other pollutants from entering the nation’s waters each year. These compliance measures are unprecedented in the coal mining industry.

In a complaint filed on May 10, 2007, the government alleged that Massey violated its Clean Water Act permits more than 4,500 times between January 2000 and December 2006. The complaint alleged that Massey discharged excess amounts of metals, sediment, and acid mine drainage into hundreds of rivers and streams in West Virginia and Kentucky. Many of the pollutants were discharged in amounts 40 percent or more than allowed. Some pollutants were discharged at levels more than 10 times over the permit limits.

The complaint also alleged that Massey spilled large amounts of slurry, which is waste containing metals and sediment, into local waterways numerous times. The spills occurred as a result of failures in the processing, storage, and transportation of coal slurry.

In addition to the penalty, Massey will invest approximately $10 million to develop and implement a set of procedures to prevent future violations. Massey will implement an innovative electronic tracking system that allows the company to quickly address compliance problems and correct any violations of permit limits. This measure fits within a comprehensive environmental compliance program that Massey has agreed to implement, which includes in-depth internal and third-party audits, employee training, and a plan to prevent future slurry spills.

Massey will also set aside 200 acres of riverfront land in West Virginia for conservation purposes and protection from future mining. The company is also required to perform 20 projects downstream from mining operations.

The consent decree, lodged in the United States District Court for the Southern District of West Virginia, is subject to a 30-day public comment period and approval by the federal court.