EU investigate support Iberpotash in Spain

EU to investigate support for Iberpotash in Spain

11:57 AM, 27th January 2016
EU to investigate support for Iberpotash in Spain

BRUSSELS, BELGIUM: Following a complaint, the European Commission (EU) said that it has opened an in-depth investigation into whether public measures in favour of Spanish mining company Iberpotash SA, gave it a selective advantage over its competitors, in breach of EU State aid rules.

Iberpotash (renamed ICL Iberia Suria & Sallent in 2014) owns and operates several potash mines in the Catalonia region of Spain. Potash is mainly used to make fertiliser. The mining and primary processing of potash also produces salt as a by-product.

In 2012 the Commission received a complaint alleging that Iberpotash benefitted from several state aid measures to support its mining operations, namely:

Financial guarantees related to environmental protection

The first measure concerns the financial guarantees provided by Iberpotash to regional public bodies to fulfil its environmental protection obligations. These obligations relate to waste from Iberpotash’s mines and the guarantees are supposed to cover the potential cost of rehabilitating the land.

The commission investigation will now focus on whether the amount of the financial guarantee, set originally at €2 million, is significantly lower than what is required by environmental rules, in particular the EU mining waste directive and relevant national and regional rules. If confirmed, this would give a financial advantage to the company.

Financing of environmental protection measures

Second, the Spanish authorities fully financed €7.9 million of costs to physically cover one of Iberpotash's waste heaps and reduce pollution. The commission will assess whether these costs should have been borne by Iberpotash, as the polluter. If confirmed, this would entail a breach in the ‘polluter pays’ principle, since a public authority would be bearing the clean-up costs rather than the company responsible for the pollution.

Both measures may give Iberpotash a selective advantage over its competitors, who have to bear those costs and may therefore involve state aid in the meaning of the EU rules. The commission will now investigate further to find out whether its initial concerns are confirmed or not.

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