UPDATE 1-Massey unit to pay $4.2 mln after mine deaths

WASHINGTON, Dec 23 (Reuters) - A subsidiary of Massey Energy (MEE.N: Quote, Profile, Research), Aracoma Coal Co, will pay $4.2 million for safety violations that led to the deaths of two miners in 2006.

Aracoma Coal has agreed to pay $2.5 million in criminal fines for nine counts of willfully violating mandatory safety standards, and one count of making a false statement, the U.S. Justice Department said.

The company also agreed to pay $1.7 million for civil violations of the Federal Mine Safety and Health Act.

"The global settlement is the largest financial settlement in the coal industry's history," the Justice Department said in a statement.

In January 2006, a fire in an underground Aracoma mine in West Virginia trapped 12 miners who unsuccessfully tried to find their way through a primary underground passageway. Two suffocated as they searched for an alternate escape route.

Aracoma admitted in a plea agreement that its employees removed two permanent ventilation controls in late 2005 to allow the installation of a piece of electrical equipment and to ventilate equipment that had been overheating.

The ventilation controls were not replaced and the company admitted that it failed to provide additional ventilation controls leading to the mine's primary escape route, the Justice Department said.

Aracoma said that since the fire the new president of the company, John Jones, has worked to create a renewed focus on safety.

"While we will never forget the loss of our two members, resolving these issues... will help all of us at Aracoma Coal Company move forward from this tragic accident," Jones said in a statement. (Reporting by Diane Bartz; Editing by Tim Dobbyn)