Massey Energy officials are trying to reassure investors that the company can recover from an explosion that killed 29 people at one of its most valuable coal mines.
A growing number of investors are questioning Chief Executive Don Blankenship's role. Lawsuits filed on behalf of victims and shareholders are increasing. Government regulators continue to criticize the company's safety record. And the company says second-quarter losses could range from $80 million to $150 million.
On Thursday, Blankenship sought to reassure Wall Street.
"The explosion was not caused by willful disregard for safety regulations as the media would have you believe," Blankenship said during a conference call with analysts. "Some of the implications have been that we don't focus on safety and we don't put dollars on safety. Nothing could be further from the truth."
Massey's board of directors, meanwhile, issued a statement saying Blankenship has its full support.
"During times like these, a change in senior management is not appropriate or in the best interest of our members and shareholders," lead independent director Bobby Inman said. "Therefore, we want to emphasize that Don Blankenship has the full support and confidence of the Massey Energy Board of Directors."
Massey's shares fell $1.06 or 2.42 percent, to $42.73 in afternoon trading Thursday. They are down more than 22 percent from their close of $54.69 on April 5, the day of the mine blast.
The federal Mine Safety and Health Administration has questioned Massey's safety record.
The rate of serious violations that required evacuations and immediate repairs at Upper Big Branch was 19 times the national rate, the agency said this week. MSHA is tentatively blaming a preventable buildup of explosive methane gas and coal dust for the fatal blast.
Massey operations accounted for more than 14 percent of 57 problem coal mines singled out for a national MSHA inspection blitz last weekend. The agency has not released information about how many violations were found during the blitz.
Blankenship described the action as routine.
"A blitz is where they show up with a team of inspectors, might be 10 or 12, and they might spread out on shifts and those inspectors might be from other districts in order to get a fresh look," he said.
Upper Big Branch is among Massey's most valuable operations and Massey is scrambling to replace 1.6 million tons of lost 2010 production.
Massey plans to replace 1.3 million tons by adding shifts at other mines and opening three new underground mining sections.
Roughly 30 percent of the replacement coal is the same quality, said Mark Clemens, a senior vice president. "We have talked to many of our customers and they have agreed to change," Clemens said. "We don't see it being that big of a difference."
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