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Spanish coal unions order return to work after two-month strike

Spain's largest coal miners' unions have told members to return to workFriday and for barricaded workers to halt protests in the Asturias and Leonmines despite a lack of compromise with the government.

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With talks this week between the Industry Ministry and union leadersfailing to make any headway, the CCOO and FITAG UGT Unions told miners toreturn to work Friday as they prepare further industrial action.

"Since there has been no agreement or even any willing to reach one, themeeting resolved nothing and has just left continuing doubts over the futureemployment of the workers as well as the future of the companies and themining regions concerned," a FITAG UGT spokesman told Platts Friday.

Coal workers went on strike in May to protest budget cuts to thesubsidized industry. Besides the drop in government aid to the sector, thereare greater fears about a new national plan for the industry which will cover2013-18 and is due to be negotiated in September. The 2013-18 plan willinclude a program to close all of Spain's mines unless they are able to repayany subsidies they have received, in line with EU legislation.

Earlier this week miners from the Aragon region returned to work aftermore than 60 days on strike, while workers at Hullera Vasco-Leonesa alsovoted 95% in favor of a return to work Wednesday.

The unions remained defiant however, and vowed Thursday that they wouldannounce a new round of industrial action in the coming days.

SUBSIDY CUTS

The strike, during which there has been a march on the capital, Madrid,and a number of confrontations between strikers and police began in May,following a round of austerity cuts from central government which cutsubsidies for the coal mining industry to Eur253 million ($309.36 million)from Eur703 million for this year, according to union figures, although thegovernment disputes the figure, saying that subsidies this year still totalEur656 million.

Secretary of State for Energy Fernando Marti said in a statementWednesday that there was no "room for maneuver" to increase payouts to coalmining companies, adding that funds for infrastructure and training hadalready been released while funds for early retirement had already started tobe paid.

The payouts for early retirement, which the Ministry says are at anaverage age of 47 or 48 years, are equal to about Eur300 million of the totalsubsidy, according to Industry Minister Jose Manuel Soria.

However, this budget disagreement looks to have become the first shotsin a wider sector review which could see Spain close all the country's minesthat are in receipt of state aid.

The ministry asked unions and companies Wednesday to present writtenproposals to speed up the dialog, which could effect the sector plans thatwill cover spending and planning for 2013-18.

Industry Minister Jose Manuel Soria said he would like the parties tocome up with a specific plan for that period that could reconvert thecoal-mining regions by using the funding to set up technology parks to createadded value to the industry.

Spain has coal reserves totaling 4.5 billion mt, of which accessiblereserves total 1.2 billion mt. The country produced 8.4 million mt of coal in2010 and imported 12.8 million mt, according to data from Eurocoal, althoughdomestic output more than doubled after January 2011 due to a round ofincentives introduced last year for power generators to burn domesticallymined coal.

--Gianluca Baratti, newsdesk@platts.com
--Edited by Jonathan Dart, jonathan_dart@platts.com