WASHINGTON, Fri Jan 4, 2013 — Two top U.S. senators are calling for the Interior Department to investigate whether coal companies stand to short taxpayers hundreds of millions of dollars on export sales.
Democratic Sen. Ron Wyden, the incoming chairman of the Energy and Natural Resources Committee, and the panel’s leading Republican, Sen. Lisa Murkowski, said they were concerned that coal companies may be shorting royalty payments.
At issue is mining in the vast Powder River Basin in eastern Wyoming and Montana which is coal rich and chiefly on federal land. Mining companies pay a royalty to extract fuel from that region.
The lawmakers cite a Reuters investigation into how companies like Arch Coal Inc, Peabody Energy Corp. and Cloud Peak Energy Corp. account for royalties on sales to Asia from the Powder River Basin.
“If any violations of the law have occurred, companies should be required to cure any gap in royalty payments and, if misconduct has occurred, civil penalties should be levied,” a letter from the lawmakers sent on Thursday to Interior Secretary Ken Salazar reads.
WASHINGTON, Tue Dec 4, 2012 — U.S. miners who are booking big profits on coal sales to Asia are enjoying an accounting windfall to boot.
By valuing coal at low domestic prices rather than the much higher price fetched overseas, coal producers can dodge the larger royalty payout when mining federal land.
The practice stands to pad the bottom line for the mining sector if Asian exports surge in coming years as the industry hopes, a Reuters investigation has found.
Current and former regulators say their supervisory work has lagged the mining industry as it eyed markets across the Pacific. They say they will now give the royalty question a close look.
“We are committed to collecting every dollar due,” said Patrick Etchart, spokesman for the Office of Natural Resources Revenue, which collects federal royalties.
At issue is the black rock pulled from the coal-rich Powder River Basin in Wyoming and Montana. Miners there say they abide by the letter of royalty rules that call for the government to get a 12.5 percent cut on coal sold under federal lease.
ST. LOUIS — Peabody Energy Corp’s quarterly profit beat Wall Street estimates as the largest U.S. coal producer realized higher pricing in all regions and domestic volumes increased.
Third-quarter profit rose to $283.5 million, or $1.01 per share, from $237.6 million, or 83 cents per share, in the year-earlier period.
Excluding items, it earned 87 cents per share. Analysts were expecting 85 cents per share, according to Thomson Reuters I/B/E/S.
Revenue rose 9 percent to $2.04 billion, beating estimates of $2.02 billion.
Earlier in the day, ArcelorMittal unexpectedly pulled out of its joint $5 billion bid with Peabody for Australian miner Macarthur Coal , just a day after the buyers said they had secured a majority of shares.
“While we anticipated a positive joint venture with ArcelorMittal, we have always preferred a larger ownership. We partnered with ArcelorMittal to increase the likelihood of achieving control of Macarthur, which has now occurred,” Peabody CEO Gregory Boyce said in a statement on Tuesday.
St Louis-based Peabody’s shares closed at $40.94 on Monday on the New York Stock Exchange. The stock has lost about 36 percent of its value this year, in line with the decline in the Dow Jones coal index.