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EU calls time on loss-making coal mines

image captionGerman coal mines are struggling to compete with cheaper imports

Loss-making coal mines across the EU will have to close over the next four years, the European Commission says.

State subsidies for such mines will only be allowed if a closure plan is in place. Production subsidies are to be replaced by social and environmental aid for affected areas.

The new regulation targets hard coal - not lignite (brown coal).

Most subsidies go to mines in Germany's Ruhr region, north-west Spain and Romania's Jiu Valley.

The Commission says the sector employs around 100,000 people in Europe: 42,000 in the coal sector itself and more than 55,000 in related industries.

The EU Competition Commissioner Joaquin Almunia said the aim "is to ensure a definitive closure of uncompetitive mines by 1 October 2014".

Hard coal production in the EU stood at 147m tonnes in 2008, or 2.5% of world production, the Commission says. More than half of the coal used by coal-fired power stations in the EU is imported.

In 2008, total aid to the EU's hard coal sector fell to 2.9bn euros (£2.5bn), from 6.4bn euros in 2003. In the same period, the proportion of aid used for production fell by 62%, as more was channelled towards covering the social and environmental costs of mine closures.

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