This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

APNewsBreak: Senator: No Coal Royalty Violations

Salazar said the issue underscores the need for reforms in how royalties are calculated, which was last updated in 1989, before the recent spike in coal exports. He said his agency is pursuing changes that would make the process more transparent.

Murkowski's office said she was open to changing royalty rules if needed but was waiting for the issue to further unfold.

"It doesn't appear there were any knowing or willful violations of the royalty law. That doesn't mean they might not find violations," said Robert Dillon, the Republican's spokesman.

Companies defend their use of affiliates for export sales, arguing that the higher price their fuel fetches in Asia largely reflects additional shipping costs. That should be counted as a different line of business than mining, they contend.

But the chief of the Montana Department of Revenue's business tax division, Lee Baerlocher, said the industry's practices have the attention of government auditors.

"It's an audit red flag, meaning we've got to look into it, but it doesn't necessarily mean that's not a fair price," Baerlocher said.

Until the audits are completed, Walter Archer with the Montana-based Northern Plains Resource Council said the government should stop leasing coal from federal lands. Industry representative Bud Clinch with the Montana Coal Council said that's unwarranted given no substantial violations have been issued.

Half of royalties go to the federal government and half to the states. Strip mines that account for the bulk of coal from public lands have a 12 percent royalty rate.

U.S. coal exports hit record levels last year â¿¿ an estimated 124 million tons. That includes increasing quantities of steam coal used in power plants shipped to Asia by companies including Arch Coal Inc., Peabody Energy Corp., Cloud Peak Energy Inc., and Signal Peak Energy.

Asian markets have given the industry some sorely needed relief in the face of declining domestic demand.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 17,719.92 -78.57 -0.44%
S&P 500 2,080.41 -9.70 -0.46%
NASDAQ 5,108.6660 -18.8590 -0.37%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs