Mine Operators Face Additional Challenges, Burdens, Under New Specialized SEC Disclosure Regime


Think beyond compliance. Providing the right information will enable smart operators to shape the message existing and potential investors receive under the new specialized SEC disclosure regime.

Mine operators who are public companies have recently become subject to additional Securities & Exchange Commission (“SEC”) disclosure burdens. These obligations extend to all mine operators – coal and metal / non-metal. The passage of the Dodd Frank Wall Street Reform and Consumer Protection Act (“Dodd Frank”), specifically section 1503 therein, imposes a series of specialized disclosure obligations for securities issuers who are mine operators or who have subsidiaries who are mine operators. Prior to Dodd Frank, Mine Operators had substantially greater discretion as to what information must be disclosed in their periodic reporting. At that time, the central principle was that information that investors would find material to the total mix of information available must be disclosed. With the enactment of these specialized disclosure requirements, operators’ discretion to decide what information is material has been lost.

In the abstract, the obligation to report this information is not terribly alarming. However, the new disclosure regime ignores several realities in the relationship between the Mine Safety and Health Administration (“MSHA”) and mine operators. Disclosure of the required information alone, discussed below, does not account for the fact that a substantial proportion of MSHA’s enforcement actions are subsequently reduced or vacated. The SEC has explicitly stated that violations must still be disclosed, even if they are subsequently reduced or vacated.

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Published In: Administrative Agency Updates, Business Organization Updates, Energy & Utilities Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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