SEC Issues Final Rules Under Dodd-Frank Act Regarding Mine Safety Disclosure

On December 21, 2011, the SEC issued final rules regarding mine safety disclosure requirements required by the Dodd-Frank Act. Although the periodic and current reporting requirements have been in effect since August 2010, the SEC was authorized to issue additional rules and regulations to carry out the purposes of the legislation. The rules take effect on January 27, 2012.

Disclosure Requirements

These disclosure requirements apply to any company that is (a) a reporting company under the Securities Exchange Act of 1934 and (b) an "operator," or that has a "subsidiary" that is an operator, of a "coal or other mine" located in the United States (as each such term is defined in the rules). The rules apply to all companies satisfying these requirements, including smaller reporting companies and foreign private issuers, except as described below. The rules also clarify that orders and citations issued to independent contractors (who are not subsidiaries of the reporting company) would be reported by the independent contractor, if it is a reporting company, and not by the reporting company that owns or operates the mine.

Under this new framework, reporting companies will be required to file the itemized disclosure, on a mine-by-mine basis, in a new exhibit to the applicable periodic report and include a brief disclosure in the body of the periodic report noting that such information is included in the exhibit. The rules include an example of the tabular disclosure that may be used. The rules clarify that this tabular disclosure must include information about orders or citations that were received during the time period covered by the report, even if such orders or citations were subsequently dismissed, reduced, or vacated prior to the filing of the report.

As a result, each Form 10-K must include the applicable disclosure for the fiscal year only, while each Form 10-Q must include such disclosure for the quarter covered by the report. In addition, the rules provide additional guidance regarding the reporting of contested assessments and legal actions before the Federal Mine Safety and Health Review Commission. Reporting companies may continue to use footnotes to provide additional detail regarding particular items, as appropriate.

The rules also provide guidance regarding the current reporting requirements on Form 8-K for certain orders and notices received from the U.S. Department of Labor's Mine Safety and Health Administration, including imminent danger orders under Section 107(a) of the Federal Mine Safety and Health Act of 1977. New Item 1.04 of Form 8-K requires companies to disclose (a) the date of receipt of such order or notice, (b) the category of order or notice, and (c) the name and location of the mine involved, within four business days of receipt by the reporting company (or a subsidiary of the reporting company) of the applicable order or notice. Consistent with prior SEC guidance, the rules state that the current reporting requirement is not required for foreign private issuers receiving such an order or notice. In addition, the rules amend General Instruction I.A.3(b) of Form S-3 to provide that the untimely filing of a Form 8-K under Item 1.04 will not result in the loss of Form S-3 eligibility.


Overall, the rules do not require any significant changes from the disclosure requirements that took effect in August 2010, although the rules do clarify some ambiguities contained in the original legislation and questions that arose from the SEC's proposing release. Accordingly, public companies (or their subsidiaries) that are operators of a coal or other mine should continue to rely on the internal reporting procedures that they have put into place regarding mine safety disclosure. Because a reporting company's disclosures will be "filed" as opposed to "furnished," these disclosures will be subject to the same liability and certification requirements that apply to the other portions of the periodic and current reports that are filed with the SEC.

Lawyer Contacts

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Thomas C. Daniels

Michael G. Marting

Michael J. Solecki

Andrew C. Thomas

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