Massey Energy, West Virginia Mine Owner, Draws Scorn on Wall Street
Bank of America no longer intends to finance controversial mine operator.
April 7, 2010— -- Massey Energy, owners of the West Virginia mine that exploded Monday, has drawn criticism for an array of safety violations and environmental issues over the years -- so much so that even some big Wall Street banks refuse to finance the Richmond, Va.-based company.
Pressured by environmental groups and shareholder activists, Bank of America recently adopted a formal policy against financing coal mining companies that engage in mountaintop removal of coal, or strip mining. Massey is one of a handful of companies that extracts coal by strip mining. Bank of America says it is concerned about environmental issues, chiefly the contamination of ground water. The bank is now in the process of ending its relationship with Massey, sources in the environmental community and on Wall Street said, although a spokeswoman for the bank declined comment.
JPMorgan Chase stopped providing financing to Massey in 2008, an energy industry source said, although it is not clear what prompted that decision. A JPMorgan Chase spokeswoman declined comment. Last year, Citigroup also adopted its own policy to address concerns over mountaintop removal. A Citigroup spokeswoman declined comment on whether the bank currently finances Massey.
UBS appears to be Massey's sole primary investment banker at present.
Massey, like many large corporations, borrows from banks to finance operations. It currently has more than $1 billion in debt on its books.
The company's CEO, Don Blankenship, has over the years justified the controversial practice of mountaintop removal, calling it crucial to America's economy and global competiveness. He debated the issue earlier this year with environmental activist Robert Kennedy Jr.
Blankenship has also said he considers mountaintop removal operatons safer than underground mines such as Upper Big Branch south of Charleston, W.Va., where Monday's explosion killed at least two dozen miners. A Massey spokeswoman, reached in Richmond by phone, said the company was not able to comment on the incident.