The Hindu Business Line  Aug 1  Comment 
My Eco Energy (MEE), a renewable fuel company, plans to set up a chain of retail outlets in Telangana for green fuel Indizel. Presented as an alternat
The Hindu Business Line  Aug 1  Comment 
Fuel can be used without any engine modifications
New York Times  Feb 26  Comment 
In West Virginia, the name of Don Blankenship, former head of Massey Energy, can evoke hopes for bygone prosperity or the anguish of a deadly disaster.
Insurance Journal  Nov 30  Comment 
Donald Blankenship, the former Massey Energy chief executive who went to prison in the wake of a 2010 mine explosion that killed 29, plans to run for the U.S. Senate from West Virginia. Blankenship is filing election papers to run …
Insurance Journal  Sep 18  Comment 
Attorneys for former Massey Energy CEO Don Blankenship have made a last pitch to the U.S. Supreme Court to throw out his conviction connected to a 2010 West Virginia mine explosion that killed 29 miners. Attorneys for Don Blankenship say …
NPR  May 11  Comment 
Former Massey Energy CEO Don Blankenship announced his plan to appeal after he completed a one-year federal prison sentence for conspiracy to violate federal mine safety laws.
Wall Street Journal  May 10  Comment 
Don Blankenship, Massey Energy Co.’s former chief executive, lashed out at prosecutors on social media on the day he finished his one-year prison sentence related to a 2010 West Virginia mining disaster.
Insurance Journal  Mar 1  Comment 
A federal appeals court has refused to rehear the case of former Massey Energy CEO Don Blankenship in the deadliest U.S. mine disaster in four decades. The 4th U.S. Circuit Court of Appeals handed down the order Friday. In January, …
Insurance Journal  Jan 20  Comment 
A federal appeals court on Thursday rejected former Massey Energy Co Chief Executive Officer Donald Blankenship’s bid to overturn his conviction and one-year prison sentence related to his role in a 2010 West Virginia mine explosion that killed...
Reuters  Jan 19  Comment 
REUTERS - A federal appeals court on Thursday rejected former Massey Energy Co Chief Executive Officer Donald Blankenship's bid to overturn his conviction and one-year prison sentence related to his role in a 2010 West Virginia mine explosion that...


Massey Energy Company (NYSE: MEE) is America's 4th largest coal producer by revenue. Operating in the Central Appalachia region, which includes West Virginia, Virginia, and Kentucky, Massey Energy mines, processes, and sells low-sulfur, high-quality coal for a variety of industrial uses, including electricity generation and steel making.

Massey owns 2.3 billion tons of coal reserves and has 68 million raw coal tons of annual processing capacity, making it the largest coal producer in Central Appalachia by a wide margin. As an energy provider, and specifically a provider of nonrenewable energy, Massey is very sensitive to the world's demand for energy, and the growing global trend toward cleaner energy sources.

In January 2011 it was acquired by a Alpha Natural Resources (ANR) for $7.1 billion. When the combination is complete (late 2011) the new company will have 110 active mines, rank first in metallurgical coal production, first in coal reserves (5.1 billion tons). Synergies of operations will save the company about $150 million a year.

Company Overview

Massey Energy produces, processes, and sells bituminous coal of various steam and metallurgical grades, primarily of low sulfur content, through 23 processing and shipping centers.[1] At January 31, 2010, the Company operated 56 mines, including 42 underground mines (two of which employ both room and pillar and longwall mining) and 14 surface mines (with 12 highwall miners in operation) in West Virginia, Kentucky and Virginia. The Company produces coal using four mining methods: underground room and pillar, underground longwall, surface and highwall mining. In April 2010, the Company completed its acquisition of Cumberland Resources Corporation.[1]

Massey sells two main types of coal: steam coal, which is used by utility companies to generate electricity; and metallurgical coal, which is used to produce coke, a key component in steel production. MEE sells the highest-valued steam coal in the United States, and Massey's metallurgical coal is exported around the world due to its high quality and environmental friendliness (low sulfur content).

Business and Financial Metrics

Second Quarter 2010 Results (ended June 30, 2010)[2]

For the second quarter of 2010, Massey Energy reported a net loss of $88.7 million or $0.88 per share. Massey generated $693.1 million of produced coal revenue in the quarter from the sale of 9.8 million tons of coal. By comparison, Massey reported net income of $20.2 million on produced coal revenue of $603.2 million in the second quarter of 2009 from the sale of 9.4 million tons of coal.

Trends and Forces

Massey's safety record tainted by the Upper Big Branch mine disaster

Massey Energy's Upper Big Branch coal mine had been cited hundreds of times for safety violations before it exploded in April 2010, killing 29 workers. Massey Energy blamed the deadly explosion on a natural event that could not be prevented. Mine safety experts and federal mine safety officials are dismissing that theory as ‘self-serving and unlikely.’ Massey Energy is basing the theory on elevated methane gas readings inside the Upper Big Branch mine well after the April 5th blast. There were methane readings inside the mine 2.5 times above normal. It has been theorized that the rush of methane came from a large crack in the mine floor.[3]

The Upper Big Branch disaster has tainted Massey's safety record and could subject the company to government oversight and further safety regulations.

Rising Oil Prices Increase the Demand for Coal

In many situations, coal is a viable substitute for oil as a source of energy. Oil prices have been rising in recent years, as the supply from oil-producing regions such as the Middle East has been restricted. Even with the frenzy of oil exploration and production in the U.S. recently, Central Appalachia's coal reserves still represent the energy content equivalent of all proved oil reserves in the United States. Massey controls 1/3 of the reserves in Central Appalachia, and stands to profit from the rising oil prices, which will push up demand for coal.

Natural Resource Scarcity Benefits Suppliers With Proven Reserves

As the largest producer in the Central Appalachia region, with 2.2 billion tons in reserves, Massey may be the only firm in the region with the reserves to continue operations for the next decade without needing to move into higher-cost reserves or pursuing acquisitions. The growing scarcity of new reserves benefits companies such as MEE that have the potential to continue supplying in the future.

The Clean Coal Movement is Indicative of a Trend Towards Low-Sulfur Coal

As the threat of global climate change looms, nations and private companies have sought ways to minimize greenhouse gas emissions. One solution has been to use coal that emits less sulfur, an environmental hazard, into the environment. The so-called Clean Coal Movement has spearheaded a trend towards increased demand for high-quality, low-sulfur coal, such as that produced by Massey, for both industrial and metallurgical uses.

Growing Needs of Developing Economies Are Boosting Worldwide Energy Demand

With the rise of rapidly-developing economies such as those of India and China, the global demand for energy has been rising rapidly. Rising global demand for energy positively affects Massey, as demand growth has outstripped increases in supply, leading to shortages of energy sources and higher profit margins for energy companies. China and other areas of Asia have significantly increased their demand for coal specifically, demanding more coal than other sources of energy because coal is generally lower in cost, although it can be less clean. Furthermore, as oil supply diminishes, more companies around the world will turn to coal for their energy needs, which will give Massey a larger potential market.

Regulations Favoring Renewable Energy May Harm Suppliers of Nonrenewable Fossil Fuels

The global eco-friendly trend has spawned legislation in many countries in favor of renewable energy. For example, the U.S. enacted the Energy Policy Act of 1992, which introduced the Production Tax Credit (PTC) to independent power producers. This hurts nonrenewable energy companies such as Massey, which must compete with the government-subsidized renewable energy forms. However, Massey's low costs of production, relative to its coal-producing competitors, means that Massey will suffer less than competitors, and the regulations may end up helping Massey by eliminating its competing coal producers.


Massey is the fourth largest U.S. coal company in terms of revenue, behind Peabody Energy (BTU), Arch Coal (ACI), and CONSOL Energy (CNX).

  • Peabody is a coal company that operates mines across the United States and Australia, and the U.S.'s largest coal producer by a wide margin. Peabody has recently announced plans to shut down its operations in the Appalachian area in order to focus more on its business in other regions.
  • Arch Coal is the second-largest coal producer in the United States. Operating in the Powder River Basin as part of an oligopoly, with limited competition, Arch has very low costs and can maintain high profit margins.
  • Foundation Coal Holdings (FCL) is one of the largest coal miners in the country. Foundation Coal operates about a dozen surface and underground mines in Central Appalachia, Northern Appalachia, and the Powder River Basin. Foundation Coal produces and sells around 70 million tons of coal annually and has 1.7 billion tons of proved and probable coal reserves. Steam coal, produced for electric utilities, accounts for more than 90% of the company's sales. Foundation Coal also produces metallurgical coal (for steel manufacturers). In mid-2009 US coal miner Alpha Natural Resources agreed to buy Foundation, forming one of the country's top three coal producers.[4]
  • CONSOL produces multi-fuel energy, primarily for electric power generation in the United States, as well providing metallurgical coal to metal and coke producers. The company also produces and sells methane gas primarily to gas wholesalers.

MEE also competes with a wide variety of coal producers located outside of the U.S., notably companies in Australia, Canada, Columbia, Russia and Venezuela.

Massey is the largest producer in Central Appalachia by a wide margin, producing about 35% of the region’s production and approximately twice as much as the nearest competitor.


  1. 1.0 1.1 Reuters: MEE Company Profile
  2. PR Newswire: "Massey Energy Reports Second Quarter Operating Results" July 27, 2010
  3. Examiner: Massey Energy shares new theory on the April 5th Upper Big Branch Mine explosion" July 31, 2010
  4. Yahoo! Finance: FCL Company Profile
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