Explanatory Memorandum to COM(2002)742 - Monitoring of Commission Decision of 29 November 1995 on aid to be granted by Austria to Voest Alpine Erzberg Gesellschaft mbH - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2002)742 - Monitoring of Commission Decision of 29 November 1995 on aid to be granted by Austria to Voest Alpine Erzberg Gesellschaft ... |
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| source | COM(2002)742  |
| date | 18-12-2002 |
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52002DC0742
Report from the Commission - Monitoring of Commission decision of 29 November 1995 on aid to be granted by Austria to Voest Alpine Erzberg Gesellschaft mbH /* COM/2002/0742 final */
REPORT FROM THE COMMISSION - Monitoring of Commission decision of 29 November 1995 on aid to be granted by Austria to Voest Alpine Erzberg Gesellschaft mbH
1. INTRODUCTION
The Commission presents its report on the Monitoring of Commission decision of 29 November 1995 i on aid to be granted by Austria to Voest Alpine Erzberg Gesellschaft mbH pursuant to article 3 of that decision. It covers developments up to 30 June 2002 on the basis of information provided by the Austrian authorities in their letter of 7 November 2002.
2. DESCRIPTION OF THE AID AND OF THE CONDITIONS IMPOSED
Approved aid amounts to EUR 19.77 million to cover operating losses over the period 1995-2002 and EUR 9.88 million to cover the costs of closing down mines safely and in an environmentally friendly manner. This aid is intended to enable it to close down the company's mining operations gradually up to the year 2002.
Authorisation of the aid was subject inter alia to the following conditions:
- the annual aid ceilings and the production ceiling mentioned below were not to be exceeded (so far observed),
- the amount of operating aid was not to exceed the difference between production costs and revenues (so far observed),
- the price charged for iron ore was to be in line with market prices and was not to be lower than the price of imported iron ore (so far observed).
3. PRODUCTION AND SALES
In the first half of 2002 VAEG produced 480 000 tonnes of iron ore with an average content of 33.6% Fe and 487 000 tonnes of low grade products which its only client, voestalpine AG (formerly Voest Alpine Stahl AG), can use for the blast furnace burden (Möllerzusatzmaterial). It should be recalled that the authorised ceiling for 2002 amounts to 700 000 tonnes of iron ore.
The standard-grade iron ore was sold at EUR 10.14 per tonne.
The low-grade material (Möllerzusatzmaterial) was sold at EUR 6.03 per tonne, fixed on the basis of the market price for lime gravel (Kalkschotter).
The average price for deliveries of iron ore and low-grade material (Möllerzusatzmaterial) results in EUR 8.05 per tonne. Including the costs of transport to voestalpine/Linz, the price charged was EUR 53.50 per tonne Fe.
The above price per tonne Fe for iron ore is higher than the comparable price for imported iron ore. It may therefore be concluded that the prices charged in the first half of 2002 were not lower than required under Article 2 of the Commission's Decision of 29 November 1995.
A detailed overview of production, production costs, sales, prices and losses is given in the Annex.
4. AID PAYMENTS IN RELATION TO AID AUTHORISED
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* For details on the period 1995 - 2001 see previous Reports
In the first half of 2002 no aid was paid to the company.
5. EVOLUTION OF WORKFORCE
The plan for reducing the workforce is as follows:
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Departing from the original plan the total workforce was reduced to 174 by 30 June 2002. Reduction of workforce is therefore ahead of plan.
ANNEX
Comparison of production costs and revenues
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