BILLINGS, Mont. (AP) - The U.S. Secretary of Interior says his agency is investigating whether mining companies are skirting royalty rules as they increase exports of coal to Asia, but have issued no violations yet. Secretary Ken Salazar said in a letter to Congress released Friday that he has asked the Interior Department's Office of Inspector General to look into the issue. Salazar was responding to concerns raised by Oregon Sen. Ron Wyden and Alaska Sen. Lisa Murkowski.
They warn that as coal exports grow, taxpayers could lose many millions of dollars annually if royalties are unfairly calculated. At issue is when companies use affiliates to sell coal from mines in the Western U.S. to Asia. The parent company pays government royalties based on the mine price, then the affiliate ships the fuel overseas where it gets a higher price.