TORONTO (miningweekly.com) – Massey Energy, which owns the Upper Big Branch (UBB) coal mine in West Virginia where an explosion killed at least 25 miners earlier this week, is working on plans to increase production at its other mines to make up for losses at UBB.

However, it warned that it does not believe it can offset 100% of the planned UBB production for this year.

Massey also defended its approach to safety, in response to criticism that has erupted in the wake of the accident.

The company is working “around the clock” to regain access to the mine, so that search-and-rescue efforts for four missing miners can resume, it said in a regulatory filing.

Rescuers entered the mine for a third time on Friday morning, but had to pull out once again, this time because of “smoke and signs of fire”. Previous attempts to enter the mine were abandoned because of high levels of toxic gases, and rescuers have been working all week to ventilate the mine.

Massey said it had planned to ship about 1,6-million tons of metallurgical coal from the UBB mine over the remainder of 2010, at an average sales price of around $91/t.

The company is drawing up a mitigation plan, which will involve changes to some mine plans at other operations.

“We have a significant amount of mining equipment available that can be deployed, as well as mines where we can produce additional coal similar in quality to that of UBB,” the company said.

It expects that most of the UBB miners not working because of the accident will be deployed at other Massey operations.

The company expects to open the UBB mine “at some point in the future”, but said there is no way to predict when normal operations may resume.

The company will cooperate with state and federal agencies in a full investigation into the cause of the explosion, which remains unknown.

“Only following the conclusion of the full investigation and remediation of any issues identified, will we be able to determine when the mine will reopen.”

US President Barack Obama has ordered federal mine safety officials to report next week on their initial assessment of the cause of the explosion, the mine's safety record and measures that should be taken to prevent future disasters.

The President will meet next week with Secretary of Labor Hilda Solis and Mine Safety and Health Administrator Joe Main, the White House said.

SAFETY

In response to reports criticising its safety record, Massey argued that its lost-time incident rate has been better than the industry average for 17 of the past 19 years, and improved “significantly” in recent years.

The company also said that the UBB's ratio of violations per day of inspections by the Mines Safety and Health Administration (MSHA), at less than one a day since January 2009, is “consistent” with national averages.

“Most of the citations issued by MSHA to UBB in the last year were resolved on the same day they were issued, the company said.

“Media reports suggesting that the UBB tragedy was the result of a willful disregard for safety regulations are completely unfounded.”

Massey said that it did not have business interruption insurance for the UBB mine, but that it did carry third-party insurance coverage that applies to litigation risk.

“We believe this coverage will apply to litigation that may stem from the UBB explosion,” the firm said.

Three people have died at the UBB operation in the last 12 years, and the mine received some $900 000 in fines from the MSHA in the last year.

Shares in Massey Energy, which has mines in West Virginia, Virginia and Kentucky, gained 2,47% on Friday morning, to $47,28 apiece by 10:08 in New York.

The company announced last month it would buy privately owned US coal miner Cumberland Resources, and confirmed on Friday that the transaction will go ahead as planned.

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