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Romania to spend over 110 mln lei (23 mln euro) to close down unprofitable coal mines

Romania to spend over 110 mln lei (23 mln euro) to close down unprofitable coal mines License: Creative Commons CC0

BUCHAREST (Romania), April 11 (SeeNews) – Romania' s government said it decided to pay more than 110 million lei (23 million euro) to close uncompetitive coal mines, in order to comply with a plan agreed with the European Commission.

The government will grant 60.6 million lei to Hunedoara energy complex (CEH) to cover the cost of shutting down two coal mines, and a further 52.7 million lei to close three mines in the Jiu Valley, in southwestern Romania, government spokesman Nelu Barbu said in a televised statement broadcast on Digi24 on Wednesday evening.

The government and the European Commission have agreed on a plan to close the loss-making coal mines in 2012.

The Jiu Valley National Mine Closing Company is currently managing the closure of three coal mines - Petrila, Paroseni and Uricani, according to the government.

The government said last month it planned to cancel some 1.6 billion lei of debt owed to the state by two major energy companies - CEH and Societatea Electrocentrale Bucuresti (ELCEN). According to information from Romania's fiscal authority ANAF, CEH owed 800 million lei to the state budget as at the end of last year.

In November, the European Commission said that Romania needs to recover some 60 million euro ($67.3 million) of illegal state aid from CEH.

CEH operates two power plants - Deva and Paroseni, as well as four coal mines providing fuel for them. The company, which employs around 6,500 people, has been loss-making since 2013. Insolvency proceedings against it have been suspended since January 2016.

(1 euro=4.7611)