Mining groups to repay aid

The European Commission (EC) has ruled that two German mining groups used state aid to illegally subsidize coal exports. Preussag Anthrazit and Sophia Jacoba have been ordered to repay DM20.35m ($11m).

The European Union`s competition watchdog stated that the aid had caused a distortion of competition in the EC calibrated anthracite market. British coal producer Celtic Energy complained in 1996 that its German rivals were able to sell anthracite in the UK at below average EU prices.

The EC also approved the acquisition of Preussag and Saaberwerke by Ruhrkohle (RAG). RAG already owns Sophia Jacoba.

The merged group will be called Deutsche Steinkohle. Saabwerke and Preussag will have to divest some of their trading activities before the merger, and the new company will have to separate its domestically produced coal sales from its import operations