US government reviews coal royalties for export market

As the US government reviews royalty rules for exporting coal, it may change the way it assesses those fees and potentially affect mining companies' profits, reports the Associated Press.

The review is focused on coal exports extracted from federal lands for which companies pay a royalty on the mined price, about $10.55 a ton, rather than the export price, $60 or more.

US senators, both Democrat and Republican, from the federal energy and natural resources committee are concerned taxpayers could lose millions of dollars if royalties are not recalculated.

The results of the review could cut into increasing coal profits as the international export market is where companies are seeing long-term growth.

In 2012, America exported 125 million tonnes of coal for a new record. If ports are expanded or newly built in Washington state, Oregon and on the Gulf Coast, some industry people project exports could double in the next five years. One analyst said the West Coast ports could increase offshore shipping by 60 to 100 million tonnes per year.

Cloud Peak energy, a major coal player, said while the company may sell coal for more on the international market, it also spends more on its shipping and handling.

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 Image: Jim Parkin /