"U.S. Plans To Plug Coal Royalty Loophole Padding Export Profits"

"The U.S. government is drafting rules designed to close an accounting loophole that in recent years has helped coal companies boost export profits and likely cost taxpayers tens of millions of dollars, people familiar with the plan said.

American taxpayers by law are due a 12.5 percent royalty on the sales of millions of tons of coal pulled each year from federal land that mining companies lease.

But a Reuters investigation found in 2012 that coal companies were using affiliated brokers to settle royalty payments on exports to Asia at much lower domestic prices.

By clearing royalties based on domestic sales rather than prices fetched overseas, coal companies stood to pocket an additional $40 million on exports from Wyoming and Montana alone in 2011, according to that investigation."

Patrick Rucker reports for Reuters October 23, 2014.