Appalachian Power, a subsidiary of American Electric Power, filed suit in April of 2002 against Massey alleging the company improperly claimed force majeure regarding a tonnage shortfall under contracts with Appalachian Power in 2000 and 2001.
Massey contended various events of force majeure had resulted in the company's inability to fully perform its obligations under its contracts.
The terms of the settlement were not disclosed, but Massey reported that it would not have a material impact on its financial results.
Dow Jones reported that in April 2003, Appalchian indicated it intended to seek about $20.3 million in damages. A Massey spokeswoman said the settlement was immaterial and that $20 million, she believed, would be material.
Massey said it had entered into a significant new multi-year coal supply agreement with AEP.
"This is an important new contract with terms that we believe are highly advantageous to both companies and will continue to strengthen our relationship," Massey CEO Don Blankenship said.
Massey Energy Company, headquartered in Richmond, Virginia, is the fourth largest coal company in the United States based on produced coal revenue.
Massey’s has extensive interests in underground operations in West Virginia including Elk Run, Green Valley, Delbarton, Independence, Knox Creek, Marfork, Martin Country, Nicholas Energy, Omar, Performance, Rawl Sales, Sidney and Stirrat coal companies.