March 5 (Bloomberg) -- Alpha Natural Resources Inc., the second-largest U.S. coal producer, agreed to pay a $27.5 million fine and spend about $200 million to implement wastewater treatment systems under a proposed settlement with the U.S. government over toxic discharges from its mines in five states.
Alpha and 66 subsidiaries will install and operate treatment systems and implement systemwide upgrades to reduce discharges of pollution from coal mines in Kentucky, Pennsylvania, Tennessee, Virginia and West Virginia, under the accord filed today in federal court in Charleston, West Virginia.
“The unprecedented size of the civil penalty in this settlement sends a strong deterrent message to others in this industry that such egregious violations of the nation’s Clean Water Act will not be tolerated,” Robert G. Dreher, acting assistant attorney general for the U.S. Justice Department’s Environment and Natural Resources Division, said in an e-mailed statement.
The fines follow water-contaminating spills in the U.S. southeast including a Jan. 9 chemical leak from a Freedom Industries Inc.-owned storage tank outside of Charleston, West Virginia that polluted drinking water for about 300,000 residents.
On Feb. 2, an estimated 82,000 tons of coal ash spilled into the Dan River from a shuttered Duke Energy Corp. coal-burning power plant in Eden, North Carolina, and on Feb. 12, 108,000 gallons of coal slurry waste leaked from a failed seal at Patriot Coal Corp.’s Kanawha Eagle Prep Plant near Winifrede, West Virginia.
The Alpha settlement covers about 79 active mines and 25 processing plants in the five states, the U.S. Environmental Protection Agency said.
Gene Kitts, Bristol, Virginia-based Alpha’s senior vice president of environmental affairs, said the company had a combined total water quality compliance rate of 99.8 percent last year.
“This settlement will provide a consistent structure to our efforts to become even better in preventing incidents and in responding quickly to situations where permit limits are exceeded,” he said.
From 2006 to 2013, the agency documented at least 6,289 Alpha violations of permit limits for pollutants including iron, aluminum, selenium and manganese, according to court papers.
Most violations stemmed from the company’s failure to operate existing treatment systems properly, install adequate ones and implement appropriate water handling and management plans, prosecutors said.
Alpha fell 1.3 percent to $5.24 at the close in New York. The shares have fallen 27 percent this year.
The case is U.S. v. Alpha Natural Resources Inc., 14-cv-11609, U.S. District Court, Southern District of West Virginia (Charleston).
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