Romania to spend EUR 37mn in 2013 to close down loss-making coal mines.

By bne IntelliNews March 22, 2013
Romania's government has earmarked RON 163mn (EUR 37mn) worth of subsidies for 2013 under a programme aimed at closing down the loss-making mines of local company CNH located in the southwestern Jiu Valley, news agency Mediafax reported quoting a cabinet decision. The programme, which has a RON 1.17bn (EUR 270mn) budget, was endorsed by the European Commission and started in 2011. As we reported, the loss-making mines are being spun off from CNH but CNH will keep its profitable mines and merge with their adjacent coal-fired plants into an integrated power company - Hunedoara. The loss-making mines will be managed by a special-purpose company under the supervision of the economy ministry. The recipient of the state aid will thus be this special-purpose company. The corporate restructuring of CNH is currently in process. The RON 163mn aid for this year will be spent to cover current losses and one-off expenses caused by the closure of some of the mines. Out of the total funds, only RON 32mn will be used for one-off spending aimed precisely at closing down the mines - while the remaining RON 131mn will cover the loss from operations generated by the coal production. The Romanian government has spent RON 127mn for the same purposes in 2011 and RON 213mn in 2012. The mine close-down programme will be completed in 2018 and 3,300 employees will finally be made redundant in the process.

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