On a recent visit to Australia to attend the Queensland Mining and Engineering Exhibition, Friedrich Wagner from the Ministry of Economics, Technology and Transport for the North Rhine-Westphalia spoke to ILN about what his ministry is doing to promote German mining equipment to the world.
In July, ten German equipment manufacturers servicing the underground mining industry put their equipment on show at QME as part of a German government initiative to help the German industry diversify into new markets.
Wagner, whose responsibilities include promoting German technology and equipment to foreign markets, said in the last five years German equipment manufacturers have seen a 15% increase in exports as a direct result of promotional work overseas.
North Rhine-Westphalia is Germany's largest federal state and home to almost all of the country's surviving hard coal mines, with 17 deep hard coal mines currently in production.
The current restructuring of the German coal industry, heavily subsidised in the past, has begun to impact on German mining machinery manufacturers, which turned over 1.5 Bio EURO in 1999, of which around 60% was export derived. Major export regions were North America with 28%, Eastern Europe with 18%, Australia 14% and Western Europe with 13%.
Most of these companies are medium sized with up to 500 employees, Wagner said. While many earn an average 50-60% income from international markets, the government is encouraging them to increase exports.
Markets of growing importance include China, Russia, India and Australia. In the last 12 months German companies have sold more equipment into China than in the previous five years, Wagner said.
Of growing importance is offering German engineering expertise to help developing countries, including modernisation of mines and mining methods. This provides a useful interface for the introduction of German equipment at a later date.
Wagner said the plan to 2005 was to gradually reduce subsidies, reduce coal production and avoid a glut of unemployment. Current production levels of around 40 million tonne per annum would be reduced to a base of around 30Mtpa by 2005, Wagner said.
Meanwhile, in late August, Wolfgang Clement, governor of North Rhine-Westphalia, announced to his state legislature that state and federal governments will jointly propose to the EU that member states be allowed to exempt the economic management of 10% of their national energy needs from EU law.
Clement's plan would succeed the 1951 European Coal and Steel Community Treaty of Paris, which will lapse at the end of 2001. The ECSC pact allows member states considerably more discretion in supporting their coal and steel industries than the rest of the body of EU law allows for other sectors.
Last December, the European Court of Justice issued a ruling calling upon the Commission to discriminate more rigorously between subsidies for unprofitable products and degressive subsidies in areas where production was being wound down. Unlike Spain, for example, Germany does not draw any distinction on the basis outlined by the Court of Justice. Its coal mining subsidies are paid out as a "platform" with around 80% of the funds used to meet the costs involved in the production of, at current levels, 35 million tons of hard coal annually.
Germany is likely to face strong opposition from the UK in pressing for the extension of subsidies. The UK is anxious to divert some of the cheaper coal available on the world export market to Germany to relieve the pressure on its own coal sector, which operates with a much lower level of subsidy.
Last year, the EU Commission approved subsidies of EUR4.2 billion for the German coal sector. The UK government earlier this year approved GBP100 million in subsidies to its coal sector, the first direct state aid to the industry for some years.
