September 07, 2008

Saarland to examine RAG\'s plans to resume mining

Frankfurter Allgemeine reported that the German state of Saarland will examine RAG Deutsche Steinkohle AG's plans to continue mining in the German state of Saarland until 2012 at reduced capacity.

Frankfurter Allgemeine cited Mr Peter Mueller state's premier as saying that at the end of February, Saarland issued a complete halt to coal mining after an earthquake induced by mining activities led to severe damage to buildings in the region. Mr Mueller said the state will only grant approval of RAG's plans if threats to workers as well as residents in the area can be ruled out.

A February earthquake in Saarland saw a halt to coal mining in the German state, with some speculating that the operations would be abandoned altogether.

RAG last weekend said that it will continue mining in the German state of Saarland for another four years, but will shut two of its mines in the region. According to a statement from RAG, the German miner will shut its Primsmulde mine as well as operations on the Schwalbache seam near Ensdorf, as threats to life and limb could not be ruled out at these sites. Operations at RAG's other projects in the region, on the Grangeleisen and Wahlscheid seams, will resume as soon as possible. According to the statement the supervisory board will meet again in early April to discuss plans to exit coal mining in Saarland in 2012.

RAG operates Germany's eight remaining hard coal mines. The sudden halt to hard coal mining has affected German utilities RWE AG and EON AG that operate several hard coal fired power plants in Germany.

The closure of Germany's underground coal mines is expected to increase the country's reliance on imported coal for its power stations. Germany imports around 40 million tonnes per year of steam coal, a figure which is expected to grow to between 48 million and 56 million tonnes per year by 2020.