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Romania’s coal production and imports rose in 2015
The net coal production in Romania amounted to 4.7 million tons of oil equivalent in 2015, which was an increase of 6.3 percent against the previous year, according to the statistics office INS, quoted by business-review.eu.
Despite the growing domestic production, imports of coal have also gone up by 11 percent to 556.400 toe.
Romania’s lignite yearly production capacity amounts to 33 million tons, while the domestic consumption stands at around 23 million tons, according to data from the draft of the Ministry of Energy. In lignite, the country has to rely on imports to cover its consumption.
At present, the country relies on coal to produce electricity, but the two energy holdings Oltenia and Hunedoara, are in difficult financial position. For instance, Complexul Energetic Hunedoara has filed for insolvency, while CE Oltenia is set to post record losses for 2015.
Victor Grigorescu, the minister of energy, said Complexul Energetic Oltenia, the coal-fired power producer, should suspend all its sponsoring programs due to the financial results which “foresee a potential record loss”
Grigorescu pointed out that the energy holding should scrap its sponsorship of the sports club Pandurii Targu Jiu.“We will make sure that on the approval of the company budget we will not have any unpleasant surprises so as to discover possible sponsorships hidden in the category of ‘other payments’,” said the minister in a Facebook post.
CE Oltenia registered a loss of RON 692 million, while in the previous year it saw a profit of RON 4.5 million. The holding currently has over 15.000 employees, according to Grigorescu.
The main shareholder in CE Oltenia is the Ministry of Economy with a 77 percent stake, while the closed-end fund Fondul Proprietatea (FP) has 21.53 percent.
CE Oltenia is currently analysing the option of opening an office in Bucharest.
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Protests by miners in western Romania over job losses highlight the country's failure to restructure the outdated mining industry.
Around 50 coal miners on Wednesday, for the third consecutive day, continued their underground protest against government plans to restructure the state-owned energy company, Complexul Energetic Hunedoara, CEH, which was declared insolvent in January.
Hundreds of coal miners at the Vulcan and Lonea mines started the protest on Monday, fearing they will lose their jobs.
Some have continued to remain underground, others have gone on hunger strike, while others have gone down the mines on their shifts but didn’t work at all.
"We are awaiting clear measures from the government to help us. All the miners are protesting against plans to restructure the compnay by cutting jobs and we will continue our protest until we will get confirmation that CEH will not be declared bankrupt,” Ioan Ciubotaru, a union leader, said on Wednesday.
The unions also complain of poor work and safety conditions and want more money invested in the sector to improve the situation.
To compound the problem, CEH general manager Viorel Stancu resigned on Tuesday, only a week after he was appointed.
Romanian Energy Minister Victor Grigorescu has said he understands the difficult situation people face, but the company needs to be restructured.
"We have to wait for a clear plan from the judicial administrator. Until then, the miners have to go back to work,” Grigorescu said on Wednesday.
Experts say there is no option except to cut costs and reduce the number of jobs. "Romania can no longer afford to pay millions of euro every year to preserve an industry that is not modernised and efficient,” economic analyst Ilie Serbanescu said.
Complexul Energetic Hunedoara, which operates two thermal power plants and four operational pit coal mines, registered losses of some 404 million lei [90 million euro] last year.
The company produces some 5 per cent of Romania’s electric power and employs 6,300 people, most of whom work in the coal mines.
Mining was once a thriving industry in Romania, employing almost half a million people, including jobs above ground.
The industry has been hard hit by a programme launched in 1997 with World Bank funds aimed at closing unprofitable mines.
Since then, some 550 mines have shut, including about 100 coal mines.
Restructuring the mining sector has proven difficult given the lack of foreign investment and official unwillingness to take the kind of drastic measures that might have made the mines more profitable, out of fear of industrial action.
Over-employment, poor working conditions and inefficient methods cost Romania around 400 million euro a year in subsidies and welfare payments for miners and their families.
State aid worth 105.119 million lei in 2016 to facilitate the closure of uncompetitive coal mines
The Government has approved a state aid worth 105.119 million lei in 2016 to facilitate the closure of uncompetitive coal mines with the National Society for Mines Closure Valea Jiului - SA Petrosani, a release of the Government's Press Office informed on Thursday.
The state aid is entirely paid from the state budget, through the Energy Ministry's budget.
The said ministry is monitoring the state aid granting level, so that the price of the coal delivered by the production units benefitting from the aid is not smaller than the price of the coal of similar quality from other states.
"The measure endorsed by the Government is in accordance with the Council Decision 2010/787/EU of 10 December 2010 on state aid to facilitate the closure of uncompetitive coal mines and the European Commission decision C(2012) 1020 final, through which the European Commission has authorized Romania to grant from public funds a state aid worth 1.169 billion lei (approximately 270 million euros) to close the uncompetitive coal mines (...) from 2011 to 2018," the Government mentioned.