On December 22, Jackson Kelly PLLC reported “Section 1503 of the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law on July 21, 2010, and requires mining companies to include certain information about mine safety and health in the quarterly and annual reports filed with the US Securities and Exchange Commission (SEC).  Last December, the SEC issued proposed rules to implement the mine safety reporting requirements.  Yesterday, the SEC released its final rules implementing § 1503 of the Act.  The rules become effective 30 days following their publication, which is expected sometime next week in the Federal Register.

“In general, the final rules follow the structure of § 1503 of the Act, which operators have already been complying with since passage of the Act.  The preamble accompanying the rules notes, ‘… we have decided not to adopt the proposals that would have expanded the required disclosure beyond that required by Section 1503 since we are persuaded by comments asserting that the added burden of these proposed requirements likely would have outweighed the potential incremental benefits of the additional disclosure.’  Some exceptions do exist where the SEC believes additional disclosures will advance the intent of the legislation; however, even in those instances the reporting periods have been reduced to limit the information required.

“Generally, the final rules apply only to mines in the United States; do not require issuers to report citations and orders issued to independent contractors working at the issuer’s mine site; define “subsidiary” as defined in Exchange Act Rule 12b-2; and do not provide special treatment to smaller reporting companies or foreign private issuers.

“The SEC rules require mining companies to provide mine-by-mine totals for the following:

• Significant and substantial violations of mandatory health or safety standards under § 104 of the Mine Act for which the operator received a citation from MSHA
• Orders under § 104(b) of the Mine Act
• Citations and orders for unwarrantable failure of the mine operator to comply with § 104(d) of the Mine Act
• Flagrant violations under § 110(b)(2) of the Mine Act
• Imminent danger orders issued under § 107(a) of the Mine Act
• The dollar value of proposed assessments from MSHA
• Notices from MSHA of a pattern of violations or potential to have a pattern of violations under § 104(e) of the Mine Act
• Pending legal actions before the Federal Mine Safety and Health Review Commission
• Mining-related fatalities.

“Reporting instructions specify that a mining company must report the total penalties assessed in the reporting period, even if the company is contesting an assessment. For legal actions, mining companies are instructed to report the number of actions instituted and resolved during the reporting period, report the number of actions pending on the last day of the reporting period, and categorize the actions based on the type of proceeding.

“In addition, the Dodd-Frank Act added a requirement that mining companies file a Form 8-K when they receive notice from MSHA of an imminent danger order under §107(a) of the Mine Act, a notice of a pattern of violations under §104(e) of the Mine Act, or a notice of the potential to have a pattern of such violations.  The new SEC rules specify that the Form 8-K must be filed within four business days and include the type of notice received, the date it was received, and the name and location of the mine involved.  However, the late filing of the Form 8-K will not affect a company’s eligibility to use Form S-3 short-form registration.”