SEC Issues Final Rule on Mine Safety Disclosure Requirements

Published on: 10 Jan 2012

On December 21, 2011, the SEC issued a final rule on mine safety disclosures that completes the Commission’s required rulemaking under Section 1503 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). The final rule is based on the safety and health requirements under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”) and requires registrants to periodically disclose mine safety violations and related information, regardless of materiality.

The final rule will become effective on January 27, 2012.


The final rule will apply to all issuers and their subsidiaries, including foreign private issuers (FPIs), whose mines are located in the United States (and thus are within the scope of the Mine Act). However, citations given to an independent contractor working in an issuer’s mine are outside the scope of the disclosure requirements, unless (1) the independent contractor is an issuer’s subsidiary or (2) the independent contractor or its subsidiaries are operators of a mine and are required to file periodic reports with the SEC. The final rule does not allow for any limited-reporting accommodations, which are sometimes offered to certain issuers under Regulations S-X and S-K (e.g., smaller reporting companies or issuers that are wholly owned subsidiaries of another issuer).

Required Disclosures

Issuers must provide mine safety disclosures on a mine-by-mine basis in their quarterly (if applicable) and annual filings. However, while fourth-quarter violations must be included in the annual disclosures, registrants are not required to separately disclose fourth-quarter activity.

The final rule does not require registrants to provide the disclosures in a specific format but suggests that tabular presentation might be most appropriate. Registrants should disclose the following:

  • The total number of:
    • Significant and substantial violations of mandatory health or safety standards under Section 104 of the Mine Act for which the operator received a citation from the Mine Safety and Health Association (MSHA).
    • Orders under Section 104(b) of the Mine Act.
    • Citations and orders for unwarrantable failure of the mine operator to comply with Section 104(d) of the Mine Act.
    • Flagrant violations under Section 110(b)(2) of the Mine Act.
    • Imminent danger orders issued under Section 107(a) of the Mine Act.
    • Mining-related fatalities.
    • All orders and citations for the respective period (i.e., not excluding any that were subsequently dismissed, reduced, or vacated).
    • A brief description of each category of violations, citations, and orders reported.
    • The total dollar value of proposed assessments from MSHA, regardless of whether these penalties are being contested.
    • A listing of notices from MSHA of a pattern of violations, or the potential to have a pattern of violations, under Section 104(e) of the Mine Act.
    • Any pending legal actions before the Federal Mine Safety and Health Review Commission.

An issuer is also required to disclose, by type of proceeding, the number of legal actions instituted and resolved during the reporting period as well as the number of legal actions that were pending as of the last day of the reporting period.

Forms 8-K and S-3

Furthermore, the final rule requires issuers to file a Form 8-K (Form 6-K for FPIs, if applicable pursuant to Regulation S-K, Rule 13a-6) upon receipt of a notice from the MSHA of (1) an imminent danger order under Section 107(a) of the Mine Act, (2) a notice of a pattern of violations under Section 104(e) of the Mine Act, or (3) a notice of the potential to have a pattern of such violations. Under the new rules, a Form 8-K must be filed within four business days and must include the type of notice received, the date it was received, and the name and location of the mine involved. In addition, the final rule specifies that a late filing of the Form 8-K will not affect an issuer's eligibility to use a Form S-3 (short-form registration statement).

Editor’s Note: The final rule amended General Instruction I.A.3(b) to Form S-3 to add Item 1.04 (for the mine safety disclosures) to the list of Forms 8-K that, if filed late, would not result in a registrant’s ineligibility to use Form S-3. General Instruction I.A.3(a) specifies that an issuer needs to have filed all required materials for the last 12 calendar months immediately preceding the filing of the Form S-3. The final rule is unclear on whether eligibility would be affected for an unfiled Item 1.04 Form 8-K (e.g., if a notice is received just before a Form S-3 is filed or before its effectiveness). Therefore, issuers should consult with their legal advisers to determine whether eligibility to use Form S-3 is affected if any Item 1.04 Forms 8-K have not been filed.

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