Shareholders OK coal merger; Massey cited again

NEW YORK (Reuters) – Shareholders cleared the way Wednesday for coal miner Alpha Natural Resources to acquire rival Massey Energy even as Massey was cited for more safety violations at one of its mines.

Votes by shareholders of both companies approved the $7 billion buyout. The transaction creating the second-largest U.S. coal miner by market value is expected to close later on Wednesday.

Massey, which has been a leader in the central Appalachian mining industry for decades, put itself up for sale last year after an accident at its Upper Big Branch mine in West Virginia killed 29 miners and sent the company’s stock tumbling.

Alpha said as part of the deal it would assume liabilities resulting from pending litigation over the Upper Big Branch disaster, the worst in U.S. mining in four decades.

A federal inquiry into the accident is continuing, but an independent probe recently blamed the disaster on safety failings by Massey.

Announcement of the Alpha-Massey deal came as the federal Mine Safety and Health Administration (MSHA) released April mine inspection data and one of Massey’s mines featured prominently.

MSHA said federal inspectors issued 20 orders and five citations at Massey’s Randolph Mine in Boone County, West Virginia. Eleven of the orders were for serious violations of a ventilation plan that presented a potential risk of fire, explosion and black lung disease, the agency said.

Since the April 2010 Upper Big Branch accident, MSHA has conducted 259 so-called impact inspections at U.S. mines. The inspections have resulted in a total of 4,610 citations and 442 orders.

Massey and Alpha shareholders both approved the deal at separate meetings. Alpha shareholders also voted to increase the company’s float to fund the deal. Approval had long been expected. On Tuesday both companies cleared several legal hurdles.

The combined company will operate approximately 150 mines and be the largest U.S. supplier of metallurgical coal, which is used in steelmaking.

Shares of Alpha Natural were down 0.6 percent to $54.45 and Massey’s stock fell 0.3 percent to $65.80 in midday trading on the New York Stock Exchange.