After almost three decades at Massey it is time for me to move on, Blankenship said at the end of a week in which Massey shut down a Kentucky mine for safety violations and a judge ruled that Blankenship must face two lawsuits holding him personally responsible for the blast at the Upper Big Branch mine in West Virginia,
Massey, based in Richmond, Virginia, has been under increasing scrutiny by federal mine safety regulators since the April 5 explosion, the deadliest U.S. coal mining disaster in 40 years.
The company's financial results have suffered since April, and Massey has said it was weighing strategic options, sparking market speculation that one of its peers may look to buy it.
Blankenship, an outspoken advocate for coal, has attracted the ire of environmentalists for Massey's surface, or mountain-top, mining in Appalachia, Virginia, which they blame for water pollution.
He has also been criticized by trade unions because of Massey's use of nonunion labor.
In a press statement issued after the close of the New York Stock Exchange on Friday, Massey and Blankenship said he would retire as chairman and chief executive on Dec 30.
President Baxter Phillips Jr. will succeed him as CEO and retired Admiral Bobby Inman, lead independent director on the board, will become nonexecutive chairman, the company said.
Blankenship has been chairman and CEO since 2000, and has been with the company since 1982. Massey said that since it went public 10 years ago, its market capitalization has risen to about $5 billion from about $758 million in 2000, while annual revenue has risen to $2.7 billion in 2009 from about $1.08 billion in 2000.
Massey, one of the Big Four U.S. coal companies, is struggling to restore its public image after the Upper Big Branch explosion revealed an extensive history of mine safety violations at several of the company's mines.
Earlier this week, Massey said it had shut a Kentucky coal mine that federal regulators cited for safety violations.
It said another of its mines in West Virginia was in danger of collapse after heavy rains.
Massey said that it had idled production at the Freedom Energy Mine No. 1, but that it still believed the mine was safe despite the Mine Safety and Health Administration's (MSHA) notification that the site had a pattern of rules violations.
Last month, MSHA went to court to force Massey to address the 81 serious safety violations issued to the mine over a two-year period.
On Thursday, Massey disclosed in a filing with the U.S. Securities and Exchange Commission that MSHA had issued an imminent danger order for its Camp Branch mine in Logan county, West Virginia.
The order said the surface mining operation had received more than two inches of rain, causing a vertical bank to be in danger of falling onto mobile equipment and operators of the equipment.
(Reporting by Steve James; editing by Andre Grenon)