Mining in Spain - what's the risk?

• Autores: Elizabeth Stephens
• Localización: Industrial Minerals, ISSN 0019-8544, Nº. 551, 2013
• Idioma: inglés
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• Resumen

  • Spain was severely impacted by the global financial crisis and its industrial minerals sector is still under pressure from the Eurozone recession. Between 2008 - 2010, industrial minerals output decreased by 50% in response to the economic downturn that affected major end markets for construction materials and ceramics. In 2010 the minerals sector contributed 1% of Spain's GDP and employed over 80,000. By 2011, as demand contracted, the contribution of the mineral sector had fallen to 0.8% of Spain's GDP and employed around 60,000 people.

    A rise in protests and other forms of industrial action have been triggered by the government's response to the financial crisis. Subsidies to the coal industry were one of the main casualties of the austerity budget, introduced by [Mariano Rajoy Brey]'s conservative government when it came to power in December 2012, and a casualty of EU directives. EU member states are not usually permitted to subsidise national industries but because of the importance of coal to Spain, accounting for 30% of electricity production, an exception was made in 2002. The exception expired in 2010 and Spain is set to stop subsidies to non-profitable mines by 2018. European coal is uncompetitive to produce and the EU is against the subsidising of industries that cannot survive on their own. EU initiatives to reduce fuel emissions by 20% by the year 2020 also make it illogical to subsides a sector with high emissions.

    The Spanish government is speeding up these cuts and reducing the subsidies it pays to the mining sector by 63% next year. The miners say the current Spanish government should stick to an agreement, signed by the previous socialist government in Spain, to reduce the subsidies by only 10% in 2013. Around 8,000 mineworkers from over 40 coal mines in northern Spain staged a nationwide strike in June 2012 organised by unions bitterly opposed to reductions in coal subsidies from U300m ($391.63*) to U110m. The subsidy cuts are intended to save Spain millions as it seeks to reduce its budget deficit and borrowing needs at a time when it is challenging to raise loans at sustainable interest rates.