Spain's unprofitable coal industry comes to an end

 Comments
Coal miners leave the mine Pozo Santiago after finishing their shift
Coal miners leave the mine Pozo Santiago after finishing their shift -
Copyright
REUTERS/Eloy Alonso
Text size Aa Aa

Spain's unprofitable coal mining industry effectively comes to an end today.

Under an EU directive, all coal deposits that no longer make money and receive public funds must stop production by January 1.

For 26 mines in Spain, that means the end of the road.

In 2016, the Spanish government announced a €2.13 billion plan, with the support of Brussels, to ease the closures. Those mines that do not meet the deadline to cease production are supposed to hand the money back.

Spain’s Socialist government agreed to a deal with unions in October to smooth workers’ access to benefits such as early retirement and earmarked a €250 million fund for aiding business ventures and re-purposing disused mines.

The government expects around 60% of workers to opt for early retirement.

For environmental reasons, the EU had wanted to end public aid to coal mines sooner, but groups from Germany — which shut down its last coal mine earlier this month — and Spain were responsible for extending the deadline all the way to the end of 2018.

Coal accounts for under 10% of Spain’s energy needs and the majority used in the country is imported.

High extraction costs have led to the gradual closure of mines in Spain, mostly concentrated in the northern regions of Asturias, Castile and Leon and Aragon.

The industry employed around 100,000 people in the 1950s but this has since dwindled to around 2,000.

“La Escondida” is the only functioning coal mine left in the northwestern province of Leon. It employs 70 workers and produces 7,000 tonnes of coal per month.

REUTERS/Eloy Alonso
Coal miners prepare to enter the mine "La Escondida" in VillablinoREUTERS/Eloy Alonso

The owner, Grupo Lamelas Viloria, is fighting against closure, saying that it has presented a project to exploit adjoining concessions that are not receiving state aid, estimating there were reserves of several million tonnes in the deposit.

According to energy-reporters.com, Spain is moving towards greener energy. The country hopes to meet the EU's 20%target for renewable energy generation by 2020. It currently stands at 17%.

Failure to meet the goals could lead to EU infringement proceedings and potential fines.