Spain Cleared to Fund Closure of 26 Coal Mines

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Spain's plan to spend 2.13 billion euro ($2.37 billion) to shut down 26 uncompetitive coal mines has been approved by the European Commission (EC).

The Commission found that the proposed aid to alleviate the social and economic impact of the closures were in line with European Union (EU) state aid rules. The EC only allows member states to support the coal industry if it is to facilitate the closure of a mine by covering production losses and exceptional costs resulting from the closure.

The proposed closures mirror a general decline in the European coal mining and coal-fired power generation sectors. Spain's coal industry has been severely impacted by low coal prices in recent years, cheap imports from the U.S. and Russia and the rapid growth of renewable energy.

In 2012, the Spanish government slashed subsidies for coal mining companies by more than 60%, sparking a year of national protests, strikes and clashes between coal miners and authorities. By 2013, subsides were cut by 80%, from 300 million euro ($334 million) in 2011 to 55 million euro ($61 million). That year the government revealed plans to petition the EC to facilitate the closure of uncompetitive mines. Spain's last lignite mines were closed in 2007, leaving a dwindling number of hard coal operations. In 2014 Spain's domestic coal sector produced 4.4 million tonnes per year compared with 20 million tonnes 1990.

"In April 2016, Spain notified plans to grant public support to the operators of 26 coal mines that are due to be shut down until 2018," the EC stated in its ruling. "The aid aims to ease the closure process by covering production losses of the mines until closure. It will also provide financial support to those workers, who have lost or will lose their jobs due to the closures, by funding severance payments and social security benefits. Furthermore, it will finance the safety and remediation works necessary after the mine closures."

It added: "The Spanish authorities have given a commitment to recover any aid from mines that have not been closed by that date."

Earlier this year, Industrial Info reported on the closure of Scotland's last coal-fired plant, the 2,400-megawatt (MW) Longannet facility. For additional information, see March 25, 2016, article--Scotland Shuts Last Coal-Fired Power Plant.

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