Two Killed in Outburst at Brody Mining

The West Virginia Office of Miners’ Health, Safety and Training reported a double fatality last night at Patriot Coal’s Brody No. 1 Mine, which appears to be the result of a coal outburst.

Killed were Eric D. Legg, 48, of Twilight, W.Va., and and Gary P. Hensley, 46, of Chapmanville, W.Va.

The Brody Mine is on MSHA’s Pattern of Violation status as of Oct. 15, 2013. The mine has challenged the status before the Review Commission, and oral arguments in the case are scheduled at the Commission in nine days on May 22. The Brody Mine was targeted in an April 2010 MSHA “blitz” after the UBB mine explosion, and targeted again in an impact inspection in Oct. 2012.

Last year Brody received 479 104(a) citations and faces $3.2 million in proposed MSHA fines. In the previous 12 months, 192 of the citations have been deemed S&S by MSHA. This year, the mine has received 61 elevated citations and orders under section 104(b); 104(d); 104(e) 104(g); or 107(a) of the Mine Act.

In the last year before it went on POV status, the Brody Mine received 268 S&S citations and orders, of which 32 were either high or reckless disregard. The mine has also received 24 elevated citations or orders per 100 inspection hours. Since the mine has been in operation beginning in
2006, it has had an injury rate higher than the national average, and last year the injury rate was 208% higher than the nation average with a total of 35 injuries. Until yesterday, the mine reported 5 injuries since January 2014.

Patriot Says Mine Should Not Be on POV

In a public statement when the mine was placed on POV status last year, Patriot said the POV status was improper, since it only acquired Brody Mining on Dec. 31, 2012. MSHA shows a controller start date of Jan. 28, 2013.

“Many of the violations and the severity measure cited in the POV finding took place under the prior owner,” Patriot said in the news release.

“Immediately following Patriot’s purchase of Brody, on January 3, 2013, the Company submitted a Compliance Improvement Plan to MSHA. Since that time, the Brody mine compliance performance (as measured by violations per inspector day) has improved by 40 percent. Additionally, all former officers and key mine-level managers at Brody were replaced shortly after the purchase was concluded.”

However, MSHA’s DRS shows a troubling recent history, as the company outlined in Security and Exchange Commission filings.

SEC records show a filing made March 7, 2013 where the company reported that it received a PPOV warning letter. Patriot then reported on March 28, “MSHA concluded that no potential pattern of violation exists under Section 104(e) of the Mine Act,” and that MSHA “withdrew the notice of potential pattern of violations.

But then, more recently on Sept. 6, 2013, Patriot said it submitted a Corrective Action Plan to MSHA to further improve safety and compliance at the Brody mine. Subsequently, on September 17, 2013, the company said MSHA approved the submitted Corrective Action Plan.

In a statement released to the public regarding the POV status, Patriot Coal said, “During the period of time it has operated as a Patriot subsidiary, the Brody mine has made considerable and measurable progress toward improved safety and compliance. Patriot firmly believes that the Brody mine does not qualify for POV status, and the Company intends to vigorously contest the POV finding.”

MSHA records show since April 1, 2013, which would cover the time period after Brody received its first PPOV warning, the mine has had 30 injuries, three of which were related to roof or rock falls. The mine also has had four miners report cases of pneumoconiosis in the last year.

Did Black Stallion Control the Mine?

Whether or not Black Stallion/Patriot had any control at the mine while Brody was the “operator,” might end up being subject to Review Commission interpretation.

SEC documents, along with a third quarter 2007 Patriot earnings conference call involving Janine Orf, Director of Investor Relations for Patriot Coal, Rick Whiting, President and CEO, and Mark Schroeder, Senior Vice President and CFO, clearly show the executives referring to the mine as a
“Patriot” mine.

Schroeder told investors, “… at the end of 2006 a contract coal supplier unexpectedly terminated its agreement for metallurgical coal supplies to our Wells complex. To replace this loss we accelerated the buildup of our new Black Stallion Mine by almost a year.”

Whiting told investors, “We were still ramping up with the Black Stallion mine; we reached the fifth unit there, final unit I believe early in October. So as we moved through the third quarter we still weren’t at full capacity there and transitioning some operating sections around from different locations to get into more met-coal and better mining conditions.”

Orr was asked by Mine Safety and Health News to confirm who controlled the mine. She said, “Brody was a contract miner for Black Stallion prior to Dec. 2012. It was not owned by Patriot.”

When asked to clarify the statement, based on SEC documents, Orr said, “Patriot owns the Black Stallion mine and reserves, but until January 1, 2013 the mine was operated by a contractor called Brody. We purchased Brody December 31, 2012 and effectively took over management and operation of the mine at that time.

A contract obtained by Mine Safety and Health News between Brody and Black Stallion clearly shows that at any time, Black Stallion could have considered the operator in “default” of the mining contract if Brody did not comply with state and federal laws.

While Brody mined the coal, Black Stallion provided a major portion of the mining equipment and infrastructure under the agreement. Brody was responsible for repair and maintenance of the equipment and infrastructure, but Black Stallion was to be responsible for any major equipment rebuilds. Black Stallion also agreed to provide power cables, pumps, belts and belt structures, methane monitor systems and other items.

Any changes in mining plans had to be approved by Black Stallion, and Black Stallion had the right to inspect all areas of the mine at any time to make sure that Brody was in compliance with all federal and state laws. While Brody had to be responsible for payment of any fines and civil penalties, Black Stallion could also elect to pay the fines, and be reimbursed by Brody. Black Stallion reserved the right to inspect all contractor’s vehicles on the property, and prohibit any unsafe vehicles.

The contract also stressed monthly tonnage requirements, and that “quantity (emphasis added) is also the essence of this agreement.” Brody was to keep accurate records of all aspects of the operation, and Black Stallion could look at the records at any time.