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Brussels, 24 April 2002

The Commission authorises the United Kingdom to grant EUR 6.5 million to its coal industry

The United Kingdom is authorised to grant a total of €6.5 million(1) by way of operating aid to four coal production units. This aid is intended to cover operating losses in 2001.

Acting on a proposal from Vice President Loyola de Palacio, the Commission today authorised the granting of operating aid(2) to the following coal production units:

  • North East Surface Mines, belonging to H.J. Banks and Co Ltd. - £739 000;

  • Central Surface Mines, belonging to H.J. Banks and Co Ltd. - £832 000;

  • Hatfield Colliery, belonging to Coalpower Ltd. - £1 157 520;

  • Ayrshire Coalfields, belonging to LAW Mining Ltd. - £1 327 000.

The aid which the United Kingdom is authorised to grant is intended to improve the economic viability of the production units by reducing their production costs. The aid will help to make the mines competitive, so that they can continue their activities beyond 2002 without subsidies from the public authorities.

The Commission has already authorised the United Kingdom to grant operating aid to Hatfield Colliery amounting to £3 807 000 for 2001. However, in August 2001 Hatfield Colliery was put into liquidation. It was bought up very quickly, in October 2001, by Coalpower Ltd., since putting it into liquidation was the result of financial difficulties which did not call into question the economic viability of the coalfields.

According to estimates verified by an independent expert, Hatfield Colliery's production costs should fall significantly. The mine should therefore become viable from 2003. The additional aid authorised by the Commission for 2001 will enable the mine to cover all the operating losses in 2001. This is necessary because of the low level of income in 2001 (production resumed only in November), and the major costs associated with restarting production.

(1) £4 million.

(2) Authorised under Decision 3632/93/ECSC establishing Community rules for state aid to the coal industry (Article 3 of the Decision).

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