Commission Decision of 22 May 2002 on the granting by Spain of aid to the undertaking Hunosa in 1998, 1999, 2000 and 2001 (Text with EEA relevance) (notified under document number C(2002) 1895)
Date: 2002-05-22
Institutions: European Commission
Subjects: Spain, State aid, coal, coal industry, control of State aid, exchange of information, financial aid, production quota, redemption

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Official Journal of the European Communities

13.7.2002

COMMISSION DECISION

of 22 May 2002

on the granting by Spain of aid to the undertaking Hunosa in 1998, 1999, 2000 and 2001

(notified under document number C(2002) 1895)

(Only the Spanish text is authentic)

(Text with EEA relevance)

(2002/583/ECSC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Coal and
Steel Community,

(b) aid of EUR 28 818 530,41 (ESP 4 795 million) to
cover the technical costs of closing down mining
installations as a result of the measures to reduce the
activity of the coal industry.

Having regard to Commission Decision No 3632/93/ECSC of
28 December 1993 establishing Community rules for State aid
to the coal industry (1), and in particular Article 2(1) and Article
9 thereof,

(4)

Whereas:

I

By letters of 19 and 21 March 2001, Spain notified the
Commission, pursuant to Article 9(1) of Decision No
3632/93/ECSC, of
support which it
intended to grant to the undertaking Hulleras del Norte
SA (Hunosa) in 2001.

financial

the

The financial measures proposed by Spain for Hunosa
fall within the provisions of Article 1 of Decision No
3632/93/ECSC. The Commission must therefore take a
decision on these measures in accordance with Article
9(4) of the Decision. The Commission’s assessment will
be based on the compliance of the measures with the
general criteria and objectives laid down in Article 2 and
with the specific criteria established by Article 4 of the
Decision, and on their compatibility with the proper
in
functioning of
accordance with Article 9(6) of
the
Commission when conducting its assessment must check
whether the measures conform with the activity-reduc-
tion plan which the Commission approved for Hunosa
in its Decision 98/637/ECSC (3).

the common market. Additionally,

the Decision,

By letter of 30 March 2001, the Commission invited
Spain, pursuant to Article 88 of the ECSC Treaty, to
submit its comments about the situation as regards the
installations of the former undertaking Minas de Lieres
SA and their operating results from 1998 to 2000. The
installations in question had been covered by closure
measures financed by State aid and were subsequently
reopened by Hunosa as the ‘Pozo Siero’ production unit.
Spain replied by letters of 14 May and 14 August 2001.
The Commission requested further information by letters
of 13 September 2001, 14 December 2001 and 13
February 2002. Spain replied to the Commission by
letters of 9 January and 8 March 2002.

By Decision No 2002/241/ECSC of 11 December 2001
on the granting by Spain of aid to the coal industry in
2001 (2),
the aid
the Commission authorised part of
which Spain was planning to grant to Hunosa produc-
tion units other than the Pozo Siero installations taken
over from Minas de Lieres SA. Pursuant to Decision No
3632/93/ECSC,
rule on the
the Commission must
following remaining measures:

(a) aid of EUR 36 060 726,26 (ESP 6 000 million) to
cover operating losses by Hunosa production units;

II

(5)

(6)

By Decisions No 94/1072/ECSC (4) and 98/637/ECSC,
the Commission gave an opinion as to the conformity of
the 1994-1997 and 1998-2001 phases of the activity-
reduction plan for Hunosa notified by Spain with the
general and specific objectives of Decision No 3632/93/
ECSC.

The Commission found that its request to Spain in Deci-
sion No 98/637/ECSC that ‘the mines taken over by
Hunosa from Minas de Lieres SA will have to close down
definitively by 31 December 1999’ had not been
complied with by the date set. By letter dated 30 March
2001, the Commission started a pre-litigation procedure
before a letter of formal notice in order to examine
whether failure to comply with this closure date was the
reason for paying aid to cover production costs between
1 January 1998 and the closure date.

(1)

(2)

(3)

(1) OJ L 329, 30.12.1993, p. 12.
(2) OJ L 82, 26.3.2002, p. 11.

(3) OJ L 303, 13.11.1998, p. 57.
(4) OJ L 385, 31.12.1994, p. 31.

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(7)

(8)

(9)

By Decision No 2002/241/ECSC the Commission
announced that it would decide at a later date on the aid
which Hunosa could have allocated to the installations
taken over from Minas de Lieres SA. The Commission
considered that this aid could total EUR 36 060 726,26
(ESP 6 000 million) for reduction of activity pursuant to
Article
3632/93/ECSC plus
EUR 28 818 531,41 (ESP 4 795 million) to cover the
technical costs of closing down mining installations
pursuant to Article 5 of Decision No 3632/93/ECSC.

of Decision No

4

justified on exceptional

Hunosa is covered by a closure plan of the kind provided
for in Articles 4 and 8 of Decision No 3632/93/ECSC,
postponement of which beyond the expiry of the Deci-
sion is
social and regional
grounds. Hunosa is receiving aid for reduction of activity
under Article 4 of Decision No 3632/93/ECSC, subject
to progressive, continuous reduction of activity entailing
a significant reduction in capacity before Decision No
3632/93/ECSC expires.

Over the period from 1994 to 2001, when Decision No
3632/93/ECSC was in force, Hunosa’s production capa-
city fell by 42 % from 3,1 million tonnes in 1993 to 1,8
million tonnes in 2001. Its workforce shrunk by 53 %
from 13 153 workers at the end of 1993 to 6 151 at the
end of 2001. Production costs held steady at around
EUR 300 per tonne of coal equivalent (tce) compared
with a selling price of EUR 56 per tce for imported coal
supplies to Spanish power stations. These trends must be
set in the context of the 46 % reduction in production
capacity in the Community from 152,5 million tonnes
in 1993 to 82,44 million tonnes in 2001. The number
of workers employed in the industry in the Community
fell by 50 % from 175 263 at
the end of 1993 to
87 800 at the end of 2001. Average production costs in
the Community stand at EUR 115 per tce.
In this
context, Hunosa has continued to take on new workers
and has closed a small number of production units. At
the same time,
it has reopened the installations taken
over from Minas de Lieres SA, which had been closed
down in 1992 and 1993 under a programme for which
State aid was granted.

(10)

The Commission considers that although Hunosa applied
an activity-reduction plan of the kind provided for by
Decision No 3632/93/ECSC from 1994 to 2001, it also
adopted various measures which rendered the reductions
in activity over the period in question insignificant in the
context of the restructuring efforts undertaken in the
Community.

(12)

(13)

compatibility of aid previously granted under Decision
No 3632/93/ECSC.

By letter of 14 May 2001, Spain sent the Commission
information about the situation as regards the installa-
tions taken over from Minas de Lieres SA by Hunosa. In
its letter, Spain enclosed a report from Hunosa stating
that in 1998, 1999 and 2000 it produced 33 000 tce,
54 000 tce and 52 000 tce respectively at these installa-
tions and that it received no State aid to cover the oper-
ating losses. The Commission considered that Hunosa’s
operating losses during the period 1998 to 2000 at the
installations taken over from Minas de Lieres SA were
higher than those notified since Hunosa did not include
the cost of labour and capital services in its notification.
After estimating that
the operating losses for 1998,
1999 and 2000 and those foreseeable for 2001 could
add up to ESP 6 000 million, the Commission asked
Spain for additional
information by letter of 10
September 2001.

the

first

2001

stood

By letter of 9 January 2002, Spain notified the Commis-
sion of Hunosa’s production costs at the installations
taken over from Minas de Lieres SA (Pozo Siero produc-
tion unit). Operating losses at Pozo Siero in 1998, 1999,
at
half
2000
of
and
million),
(ESP 1 148
EUR 6 899 618,96
EUR 7 079 922,59
million),
(ESP 1 178
and
EUR 5 529 311,36
EUR 528 890,65 (ESP 88 million) respectively, a total
of EUR 20 037 743,56 (ESP 3 334 million). Spain
stated that on 30 June 2001 Hunosa had ceased produc-
tion at the installations taken over from Minas de Lieres
SA in order to proceed with the safety and environ-
mental protection work prior to definitive closure of the
mine.

(ESP 920

million)

(14) Hunosa’s failure to comply with the conditions laid
down by the Commission for the installations taken over
from Minas de Lieres SA constitutes an abuse of aid
which calls into question the compatibility of the aid
granted in 1998, 1999 and 2000 with Decision No
3632/93/ECSC. The aid totalling EUR 19 508 852,91
(ESP 3 246 million) for reduction of activity granted to
Hunosa by Spain in 1998, 1999 and 2000 to cover
operating losses at the Pozo Siero production unit (taken
over from Minas de Lieres SA) is incompatible with Deci-
sion No 3632/93/ECSC and,
in particular, Article 4
thereof and,
incompatible with the proper
therefore,
functioning of the common market.

III

(11)

The Commission must examine whether Hunosa’s failure
to comply with the special conditions laid down for the
installations taken over from Minas de Lieres SA consti-
tutes an abuse of aid which would call into question the

(15)

The aid totalling EUR 528 890,65 (ESP 88 million)
which Spain plans to grant to Hunosa to cover operating
losses at Pozo Siero in 2001 is likewise incompatible
with Decision No 3632/93/ECSC and,
in particular,
Article 4 thereof and, therefore, incompatible with the
proper functioning of the common market.

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(16)

(17)

(18)

(19)

(20)

(21)

aid

totalling

for 2001,

EUR 35 531 835,61
The
(ESP 5 912 million),
is intended to cover operating
losses at other production units operated by Hunosa and
is compatible with Article 4 of Decision No 3632/93/
ECSC and with the proper functioning of the common
market.

The aid paid by Spain to Hunosa to cover operating
losses at the Pozo Siero production unit (taken over from
Minas de Lieres SA) must be considered to be an unjusti-
fied cash advance and, as such, must be liable to charges
at the market rate payable by the recipient. The interest
will be calculated from the date of payment of the aid to
the undertaking which received it.

IV

Spain had already granted aid in 1992 and 1993 for
closure of the installations of the former Minas de Lieres
SA and, for that reason, may grant no further aid for the
same purpose. By letter of 9 January 2002, Spain noti-
fied the Commission that during the second half of 2001
closure of the installations taken over from Minas de
totalling
Lieres
EUR 3 696 224,44 (ESP 615 million) for Hunosa. The
aid to cover these costs is incompatible with Decision
No 3632/93/ECSC and,
in particular, with Article 5
thereof.

SA will

technical

generate

costs

By letter of 8 March 2002 in reply to the letter of 13
February 2002 from the Commission, Spain stated that
in 2001 the exceptional intrinsic depreciation resulting
from the closure of other Hunosa production units
(excluding the costs of closure of the installations taken
over from Minas de Lieres SA) gave rise to exceptional
costs totalling EUR 56 332 864,54 (ESP 9 373 million).
In Decision No 2002/241/ECSC the Commission had
authorised Spain to pay Hunosa EUR 31 210 558,58
of
(ESP 5 193
EUR 25 122 305,96 (ESP 4 180 million) covers
the
costs of closing production units other than the installa-
tions taken over from Minas de Lieres SA and is compa-
tible with Decision No 3632/93/ECSC and, in particular,
with Article 5 thereof. This aid is therefore compatible
with the proper functioning of the common market.

million).

balance

The

the decline of the Community’s coal industry. In parti-
cular, Spain must ensure that aid granted to undertakings
under Article 5 of Decision No 3632/93/ECSC to cover
the technical costs of closure is used exclusively for the
purposes listed in the Annex to the Decision and that
the closure of capacity for which the aid is intended is
definitive and is carried out in optimum conditions in
terms of safety and environmental protection.

(22)

(23)

In accordance with Article 9(5) of Decision No 3632/93/
ECSC, any payment made by Spain to Hunosa in antici-
pation of authorisation from the Commission in excess
of the aid authorised for this undertaking in 2001 will
have to be repaid in full, by the undertaking which
received it, within one month of notification of this
Decision to Spain. This amount will be liable to charges
at the market rate payable by Hunosa.

In accordance with the second indent of Article 3(1) and
with Article 9(2) and (3) of Decision No 3632/93/ECSC,
the Commission must verify that the aid authorised for
current production responds exclusively to the objectives
stated in Article 4 of the Decision. Spain must notify the
Commission, no later than 30 June 2002, of the amount
of aid actually paid during 2001, and declare any correc-
tions made to the amounts originally notified. When
submitting this annual statement of aid paid, Spain must
also supply all the information necessary for verification
of the criteria set out in the relevant Articles.

(24)

In approving the aid, the Commission has recognised the
need to soften, as far as possible, the social and regional
impact of the restructuring of the coal industry, given
the economic and social situation surrounding the mines
affected.

(25) On the basis of the information provided by Spain, the
aid and measures justified above for the coal industry are
compatible with the objectives of Decision No 3632/93/
ECSC and with the proper functioning of the common
market,

HAS ADOPTED THIS DECISION:

V

Article 1

Spain must ensure that
the aid granted to current
production under this Decision does not give rise to any
discrimination between coal producers, between purcha-
sers or between users on the Community coal market.

Spain must ensure that, within the framework of the
provisions of Article 86 of the ECSC Treaty, the aid is
limited to that which is strictly necessary in the light of
the social and regional considerations which characterise

and

2000

2001,

The State aid granted by Spain to Hulleras del Norte SA
(Hunosa) to cover operating losses at the installations of the
former undertaking Minas de Lieres SA (Pozo Siero) in 1998,
1999,
EUR 6 899 618,96
(ESP 1 148 million), EU 7 079 922,59 (ESP 1 178 million),
EUR 5 529 311,36 (ESP 920 million) and EUR 528 890,65
(ESP 88 million) respectively, and the aid to cover the excep-
these installations in
tional costs resulting from closure of
is
2001,
incompatible with the common market.

totalling EUR 3 696 224,44 (ESP 615 million),

totalling

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Article 2

1.
Spain shall adopt all necessary measures to recover from
Hunosa the aid for 1998, 1999 and 2000 mentioned in Article
1, totalling EUR 19 508 852,91 (ESP 3 246 million), which
was placed at Hunosa’s disposal unlawfully.

Recovery shall take place without delay,

2.
in accordance
with the procedures laid down by national law, provided they
allow immediate, effective implementation of this Decision. The
aid to be recovered shall be liable to interest payable from the
date on which it was placed at the disposal of the recipient to
the date of recovery thereof.

intended and that any unspent, overestimated or incorrectly
used aid for any item covered by this Decision is repaid to it.

Article 5

In accordance with Article 9(5) of Decision No 3632/93/ECSC,
any payment made by Spain to Hunosa in anticipation of
authorisation from the Commission in excess of
the aid
authorised for this undertaking in 2001 shall be repaid in full,
by the undertaking which received it, within one month of
notification of this Decision to Spain. This amount shall be
liable to charges at the market rate payable by Hunosa.

Article 3

Article 6

Spain is hereby authorised to pay the following aid to Hunosa
in respect of 2001:

(a) aid for the reduction of activity of EUR 35 531 835,61
(ESP 5 912 million) under Article 4 of Decision No 3632/
93/ECSC;

(b) aid of EUR 25 122 305,96 (ESP 4180 million) to cover
technical costs of closing down mining
the measures to reduce the

the exceptional
installations as a result of
activity of the Spanish coal industry.

Spain shall notify the Commission, by 30 June 2002 at the
latest, of the amount of aid actually paid to Hunosa in respect
of 2001.

Article 7

This Decision is addressed to the Kingdom of Spain.

Article 4

Done at Brussels, 22 May 2002.

In accordance with Article 86 of the ECSC Treaty, Spain shall
take all appropriate measures, whether general or particular, to
ensure fulfilment of the obligations resulting from this Decision.
It shall ensure that the aid authorised is used for the purposes

For the Commission

Loyola DE PALACIO

Vice-President