Various media, including US news wire service MarketWatch and major newspaper the Wall Street Journal said Tuesday morning that the Appalachian company’s potential options could include selling to another coal miner or private equity firm, the purchase of another company, or a move to remain independent.
An unnamed source also told the WSJ that Massey could be in a “detailed due diligence” phase with one of these avenues by mid-November.
Company officials released a statement in response to the reports Tuesday afternoon regarding its potential strategic opportunities.
“Our board of directors and management team are always focused on opportunities to create shareholder value,” Massey said.
“However, we do not comment on specific opportunities.”
Officials followed up by noting that the company was proud of its employees and its support of the communities where it operates mines.
Investigations are still ongoing with regards to the operator’s Upper Big Branch operation in West Virginia, where 29 miners were killed in April.
Officials said in September that increased enforcement by federal officials since the blast was taking a chunk out of the company’s productivity, and it forecast a third-quarter shipment shortfall as well as an operating loss as a result of the situation.
In a public guidance update in mid-September relating to its expectations for 2010 and 2011 results, the Appalachia-based producer said it expected to ship some 39 million tons at an average $US71 per ton. The average cash cost of shipped tons is anticipated to be $60/t.
"Our operations have continued to struggle since April," Massey chairman Don Blankenship said, referring to the April 5 explosion at the UBB mine in Raleigh County, West Virginia that killed 29 workers.
"As we have noted earlier, increasingly stringent enforcement actions by MSHA across our operations and throughout the central Appalachian region have resulted in lost shifts and loss of productivity.
“As a result of these and other factors, we now expect our third-quarter shipments to approximate 10 million tons and we expect to report an operating loss for the quarter.”
Massey is the sixth-largest US coal operator. Its enterprise value as of Tuesday morning was $4.42 billion.
