EU Rules Illegal EUR98.4 Million In Aid To Sardinia Mining Company
The European Commission Thursday ruled illegal EUR98.4 million of aid from the region of Sardinia to the mining company Nuova Mineraria Silius.
The company must pay back the money.
In its ruling, the Commission found that each year since 1997 the region of Sardinia has transferred public funds in order to cover the mine’s losses, keeping in business a company that otherwise would have gone into bankruptcy. Since no restructuring has taken place, the measures must be regarded as illegal operating aid, the commission said.
“Operating aid to cover losses of companies in difficulties is the most distortive type of aid, since it undermines those companies that try to stay in business without public support,” Competition Commissioner Neelie Kroes said.
The Sardinian region owns the mining company which exploits a deposit of fluorite in the municipality of Silius. The company was established in 1992 and was put into liquidation in 1998. However, when privatization attempts failed, the mine was not liquidated but kept alive with public funds. In 2004 the company had a turnover of EUR4.96 million and 163 employees.
Dow Jones Newswires
