SEC’s Mine Safety Disclosure Rules – Securities Lawyer 101 Blog
On December 21, 2011, the Securities and Exchange Commission (the “SEC”) adopted final rules to implement the mine safety disclosure requirements of Section 1503 of the Dodd-Frank Wall Street Reform andConsumer Protection Act (Dodd-Frank). Section 1503’s disclosure requirements are currently in effect and require SEC reporting issuers that are operators of coal or other mines in the United States to make specific disclosures.
Operator has the meaning set forth in Section 3 of the Federal Mine Safety and Health Act of 1977 (the “Mine Act”) and includes any owner, lessee or other person who operates, controls or supervises a “coal or other mine” or any independent contractor performing services or construction at such mine.
The rules require that the issuer:
♦disclose in each periodic report certain mine safety violations, citations and orders and related matters for each coal or other mine that they operate; and
♦file a current report on Form 8-K to disclose the receipt of certain orders and notices from the U.S. Labor Department’s Mine Safety and Health Administration (MSHA) related to a coal or other mine that they operate.
For the time period covered by the periodic report, each mine where the issuer or its subsidiary is an operator should be identified, and also on a mine-by-mine basis:
♦the total number of mandatory health or safety standard violations that could significantly and substantially contribute to the cause and effect of a coal or other mine safety or health hazard under Section 104 of the Mine Act for which the operator received a citation from the MSHA, including any citations that are subsequently dismissed, reduced or vacated;
♦the total number of orders issued under Section 104(b) of the Mine Act, including any orders that are subsequently dismissed, reduced or vacated;
♦the total number of citations and orders for unwarrantable failure of the operator to comply with mandatory health or safety standards under Section 104(d) of the Mine Act, including any citations or orders that are subsequently dismissed, reduced or vacated;
♦the total number of flagrant violations under Section 110(b)(2) of the Mine Act;
♦the total number of imminent danger orders issued under Section 107(a) of the Mine Act, including any orders that are subsequently dismissed, reduced or vacated;
♦the total dollar amount of all proposed assessments from the MSHA under the Mine Act relating to any type of violation regardless of whether the proposed assessments are being contested or were dismissed or reduced prior to the periodic report’s filing date; and
♦the total number of all mining-related fatalities at coal or other mines that are subject to the Mine Act, except for those fatalities determined by the MSHA to be unrelated to mining activity such as homicides, suicides, deaths due to natural causes and deaths involving trespassers.
In addition, for the time period covered by the periodic report issuers must disclose:
♦a list of coal or other mines for which the issuer or its subsidiary is an operator that receive written notice from the MSHA of:
♦ a pattern of mandatory health or safety standard violations that could have significantly and substantially contributed to the cause and effect of coal or other mine health or safety hazards under Section 104(e) of the Mine Act; or
♦ the potential to have a pattern of violations described in the previous bullet; and
♦the total number of all legal actions pending before the Federal Mine Safety and Health Review Commission (the “Mine Safety Commission”) as of the last day of the reporting period involving a coal or other mine operated by the issuer or its subsidiary, including a numerical breakdown by type of legal action in accordance with the categories established in the Mine Safety Commission’s procedural rules, as well as the aggregate number of legal actions instituted and resolved during the reporting period.
To the extent that mine safety issues are material to issuers, disclosure may be required under other sections of the periodic report, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, Risk Factors, Business and Legal Proceedings.
Form 8-K Disclosure Requirements
The receipt by an issuer or its subsidiary of certain notices and orders also require the issuer to file a Form 8-K within four days of the triggering event including:
♦an imminent danger order under Section 107(a) of the Mine Act;
♦a written notice from the MSHA that the coal or other mine has a pattern of mandatory health or safety standard violations that could have significantly and substantially contributed to the cause and effect of coal or other mine health or safety hazards under Section 104(e) of the Mine Act; or
♦a written notice from the MSHA that the coal or other mine has the potential to have a pattern of violations described in the previous bullet.
For each specified notice or order, issuers are required to report under Item 1.04 of Form 8-K:
♦the date of receipt of the notice or order;
♦the category of the notice or order; and
♦the relevant mine’s identity and location.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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Brenda Hamilton, Securities Attorney
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