2006/238/EC: Commission Decision of  9 November 2005  on the measure implemented by France for Mines de potasse d’Alsace  (notified under document number C(2005) 4204)   (Text with EEA relevance)
Date: 2005-11-09
Institutions: European Commission
Subjects: France, State aid, capital increase, control of State aid, mining industry, mining operation

L 86/20

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Official Journal of the European Union

24.3.2006

COMMISSION

COMMISSION DECISION

of 9 November 2005

on the measure implemented by France for Mines de potasse d’Alsace

(notified under document number C(2005) 4204)

(Only the French text is authentic)

(Text with EEA relevance)

(2006/238/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

and 1997, to be transferred by EMC to MDPA in the
form of capital increases.

Having regard to the Treaty
establishing the European
Community, and in particular the first subparagraph of Article
88(2) thereof,

Having regard to the Agreement on the European Economic
Area, and in particular Article 62(1)(a) thereof,

Having called on interested parties to submit their comments
pursuant to the provisions cited above (1) and having regard to
their comments,

Whereas:

1. PROCEDURE

(1)

in the form of a capital

In 1994, the Commission approved a EUR 76 million
capital
injection by the French State for Entreprise
minière et chimique (hereinafter EMC), to be transferred
by EMC to the company Mines de potasses d’Alsace
(MDPA)
In its
decision (2), the Commission considered the measure to
be compatible with the common market since it was
retired
intended to offset
workers (heating, accommodation, bridging allowance
and severance grant) borne by MDPA by virtue of the
special legal status of miners (3).

the extra social costs of

increase.

(2)

the Commission approved (4)

In 1996,
for the same
reasons, three capital injections each of EUR 38 million
by the French State for EMC for the years 1995, 1996

(1) OJ C 37, 3.2.2001, p. 22.
(2) OJ C 196, 19.7.1994, p. 5.
(3) Introduced by Decree No 46-1433 of 14 June 1948 on the status of

employees of mining establishments and the like.

(4) OJ C 168, 12.6.1996, p. 11.

(3)

(4)

(5)

(6)

On 7 December 1998, the French authorities notified
three more capital
injections each of EUR 42 million
that would be granted in 1998, 1999 and 2000 to
EMC and transferred to MDPA. According to the
French authorities,
these measures were designed to
compensate MDPA for certain social and environmental
costs incurred as a result of its closure.

The additional information communicated by France to
the Commission on 22 January 1999 revealed that,
in
addition to the transfer of the aid granted by France,
EMC had subscribed to capital
increases for MDPA
every year since 1995. By letter of 14 March 2000,
the French authorities informed the Commission that
part of
the aid notified in 1998 had already been
granted to the firm. In its reply of 10 April 2000, the
Commission stated that this aid was to be regarded as
unlawful.

By letter of 10 October 2000, the Commission informed
France that it had decided to initiate the procedure laid
down in Article 88(2) of the EC Treaty in respect of the
above measures. The decision was published in the
the European Communities (5). The
Official
Commission invited interested parties to submit
their
comments on the aid.

Journal

of

The Commission received comments from the French
authorities on 28 November 2000 and on 21 and 23
March 2001. A meeting between the French authorities
took place on 2
and Commission representatives
December 2004.
information to the
Commission by letters dated 8 February 2005 and 23
September 2005.

France

sent

(5) OJ C 37, 3.2.2001, p. 22.

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2. DESCRIPTION OF THE MEASURES

(11)

2.1. The recipient

These tasks consist mainly in supporting redeployment
of the workforce and in reconverting, making safe and
transferring the sites. MDPA will be wound up on
completion of
those tasks, scheduled for the end of
2009.

(7)

MDPA had been working a sylvinite deposit in Alsace
since 1904 in order to obtain potassium chloride, which
is used as a fertiliser or as a raw material for industry. In
1967 France set up EMC (1) an industrial/commercial
establishment
in the public sector, and reorganised
MDPA into a Société anonyme à directoire et conseil de
surveillance (2),
that was a wholly owned subsidiary of
EMC.

(8) With the deposit being almost worked out, MPDA nego-
tiated in 1996 a social plan for gradually winding down
its activity until its complete closure in 2004. In addition
to MPDA, EMC then held, directly or through its holding
company EMC société anonyme (EMC SA), interests in a
number of companies operating in the chemical, animal
food, environmental and waste reprocessing sectors.

(9)

the formal

investigation
In its decision to initiate
procedure, the Commission took the view that MDPA
was the only recipient of the measures under exami-
nation. This decision concurs with that view. There is
no evidence to show that EMC subsidiaries benefited
from the aid granted to MDPA. In particular, there is
no doubt that all the funds concerned were transferred
to MDPA by EMC in the form of capital increases.

(10)

In 2002, a fire brought MDPA's mining activities prema-
turely to an end. The company's objective was amended
to reflect this development: whereas, when it was set up,
MDPA's objective was ‘to work the potassium salt and
ancillary salt mines granted to the former public estab-
lishment Mines domaniales de potasse d’Alsace’, Article
3, as amended, of its memorandum and articles now
states that the company’s objective is ‘to perform the
the potassium
tasks associated with the closure of
mines in the area to the north of Mulhouse as regards
the old workings, installations, annexes and outbuildings’.

(1) Decree No 67-797 of 20 September 1967 on the administrative and

financial organisation of EMC.

(2) Decree No 67-796 of 20 September 1967 regrouping the private
potash mines of Alsace and the National Industrial Potassium Office
into a public industrial and commercial establishment designated
EMC and Decree No 67-797 of 20 September 1967 on the admin-
istrative and financial organisation of EMC.

(12) On 1 January 2005, EMC transferred its capital holding

in MDPA to the State, free of charge (3).

2.2. The aid

The decision to initiate the procedure relates to two
distinct measures:

Measure 1 or notified measures

(13)

(14)

France paid to MDPA the aid notified in 1998 (i.e. EUR
in 1999 and in 2000) without
42 million in 1998,
is
decision. This
awaiting
therefore unlawful.

the Commission's

aid

Measure 2 or additional aid

In order for MDPA to continue its activities until 2004,
the date scheduled for closure of
the mines, EMC
injection
subscribed each year after 1996 to a capital
for its subsidiary equivalent to the losses incurred by
the latter the previous year. Table 1 shows that
the
amounts thus paid to MDPA are higher than the aid
authorised by the Commission in its 1996 decision and
the aid notified for the period 1998 to 2000.

Table 1: Details of the non-notified aid granted to MDPA

between 1995 and 2000

in EUR million

1995

1996

1997

1998

1999

2000

38

38

38

Aid approved by
the Commission
in its 1996
decision

Aid notified
1998 to 2000
= Measure 1

42

42

42

Result for MDPA

– 84

– 95 – 128 – 118

– 96

– 86

Capital increase
granted to MDPA
by EMC

Measure 2

0

0

84

98

128

117

79

46

59

86

75

37

(3) Decree No 2004-1286 of 26 November 2004 authorising the
transfer to the State by EMC of its holding in the company Mines
de potasse d’Alsace, Official Gazette of 28 November 2004.

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(15)

(16)

3. CONCLUSION

that

The Commission notes that the recipient is now wholly
owned by France,
it has definitively ceased all
economic activities in the potassium sector and that
the mines will not be reopened. The sole rationale for
MDPA's continued existence is to carry out the tasks
associated with the shutdown of mining activity and, in
particular, to adapt the site to safety and environmental
protection requirements. This latter responsibility would,
in any event, be incumbent on the State if MDPA had
folded (1). Once these tasks have been carried out, MDPA
will be wound up.

and

safety

to maintaining

In the case under examination, the activities of MDPA
linked
environmental
protection are not of an economic nature that would
justify application of
the Treaty's competition rules.
Consequently, assuming that measures 1 and 2 have
benefited MDPA and
the
Commission concludes that such distortion ended once
MDPA ceased its commercial activities and once the
mines were closed down.
It also notes that MDPA's
capital has been transferred to the State free of charge.
Under the circumstances, a Commission decision on the
classification as aid of the measures in question and on
their compatibility would have no practical effect.

competition,

distorted

(17)

The formal investigation procedure initiated pursuant to
Article 88(2) of the EC Treaty thus serves no useful
purpose,

HAS ADOPTED THIS DECISION:

Article 1

The formal
2000 in respect of Mines de potasse d’Alsace pursuant
Article 88(2) of the Treaty is hereby terminated.

investigation procedure initiated on 10 October
to

Article 2

This Decision is addressed to the French Republic.

Done at Brussels, 9 November 2005.

For the Commission

Neelie KROES
Member of the Commission

(1) See Article 84 of the Mining Code.