Coal Mining Deal Struck
February 8, 2007
It's the end of era that every knew must come. A deal to end underground coal mining in Germany was sealed on Feb. 7 in Berlin, with eight remaining pits to close by 2018 when the miners have reached retirement age.
While opencast mining of lignite for power station furnaces is to continue, the extraction of hard coal from seams up to 2,000 meters deep will end, but not before subsidies of billions of euros have been paid in to the industry.
Broad consensus
The deal was reached between the Social Democrats, who adamantly opposed any layoffs of miners, and the Christian Democratic Union, which sees the subsidies as a waste of public money. The industry absorbs 2.5 billion euros ($3.2 billion) of state subsidies per year, which works out to 75,000 per job annually and more than a miner earns.
Under a last-minute amendment to a plan announced last week, the state government of North-Rhine Westphalia, where most of the deep mines are located, is to cease subsidies in 2015, leaving the federal government to shoulder the load alone for the final three years.
The state's CDU Premier Jürgen Rüttgers, and the German Finance Minister Peer Steinbrück, who must provide the extra funds, signed the accord after a day of talks in Berlin.
Miners unions welcomed the plan as the best they could achieve, as did the state-owned company RAG, which runs the mines that gives the industry a prolonged and gentle demise. RAG is to be privatized and can likely look forward to a profitable future, as most environmental liabilities will be borne by the government.
Energy future questions
Coal mining didn't just power Germany's industrial revolution in the 19th century, it also helped spawn the country's oldest party, the center-left Social Democratic Party. Coal mining also played a leading role in helping to forge Germany's post-World War II economic miracle.
However, it's become an economic drain -- the price for a ton of quality coal for steelmaking on the world market is currently about 60 euros, the cost of wrenching one ton out of Germany's mines, which are carved into the deep earth, is about 190 euros.