Wednesday, January 04, 2006

Death Wore a Suit & Tie

First, allow me to say that my heart goes out to the families of the twelve miners killed due to an explosion at the Sago Mine in West Virginia this week. With that said, I felt everyone should know that their deaths, while horribly tragic, could have been prevented.


What I am referring to is the corporation known as International Coal Group and their abysmal safety record. In the two short years that ICG has owned this mine, they have racked up more safety violations (276 total) in two years than the previous owners, Anker Energy did in four years of ownership (172 total). Of the 276 citations, 208 were issued in 2005 alone. And here's the real kicker....Of these violations, the United States Mine Safety and Health Administration has classified 97 of them as safety violations that would likely result in a serious injury or death, including 22 separate citations for allowing combustible material such as coal dust to accumulate in the mine and 21 citations for not following its ventilation plan which prevents methane gas from building up in the mine.

You know, I don't want to depress all of my readers with such a sad story, so let's take a look at the bright side of this picture, shall we? C'mon, let's go..

Here is International Coal Group's 3rd Quarter Financial Report. Let me just give you some of the highlights of this report so that we can all feel warm and fuzzy inside:

  • Revenue was $158.4 million for the three months ended September 30, 2005, up 30% from $121.6 million in the third quarter of 2004 !
  • Operating income was $14.7 million for the three months ended September 30, 2005, up 237% from $4.4 million in the third quarter of 2004 !
  • Net income was $8.6 million for the three months ended September 30, 2005, or $0.08 per share, versus a loss of $37.2 million, in the third quarter of 2004 !
  • Earnings before net interest, income taxes and depreciation, depletion and amortization, or EBITDA, was $27.1 million for the three months ended September 30, 2005, up 102% from $13.4 million in the third quarter of 2004 !
  • For the nine months ended September 30, 2005, revenue was $465.7 million, up 25% from $373.4 million; operating income was $51.1 million, up 193% from $17.4 million; net income was $28.6 million, or $0.27 per share, versus a loss of $107.7 million and EBITDA was $83.4 million, up 47% from $56.6 million, in each case, from the comparable period last year !
  • WOOHOOO!!!

There now, don't you feel better? I'll bet all those executives and investors were able to give their children wonderful Christmas gifts with all of those profits. You see how much money you can make by taking shortcuts on safety and not keeping your mine up to code?

This is just part of an ongoing problem in this capitalist society driven by greed and lust for the almighty dollar. Workers are treated like cattle so that corporations can make enormous profits and pay their executives exorbitant salaries.

The man on the left is Ben Hatfield, CEO of International Coal Group and a man who, up until this week, was probably very happy with the hand life had dealt him. I'm sure he's going to need some of that exorbitant salary to hire some shiny new lawyers to defend him when he gets indicted for negligence and 12 counts of manslaughter. I'm thinking proper ventilation and removal of explosive substances from that mine may have been slightly less expensive than that legal team, Ben.

And where were the watchdogs in all of this? The U.S. Mine Safety and Health Administration did cite ICG. You want to know how much those citations cost? You better sit down.

They were $250 each.

Some watchdog...

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