State aid: Commission approves €26.7 million Spanish measure to support the upgrade of Cobre Las Cruces’ refinery

The European Commission has approved, under EU State aid rules, a €26.7 million Spanish measure to support Cobre Las Cruces S.A. (‘CLC’) in upgrading its refinery in Gerena, Sevilla. The measure will contribute to the EU’s strategic objectives relating to the European Green Deal and to regional development.

The Spanish measure

Spain notified the Commission of its plans to support CLC’s project aimed at upgrading and extending the lifetime and operation of its refinery in Gerena, Sevilla, approximately for 20 additional years.

In particular, the measure will help CLC transform its mono-metallurgical refinery, exclusively extracting and producing copper to date, into a poly-metallurgical refinery. The upgraded single integrated refinery will be capable of extracting and producing several metals, namely copper, zinc, lead and silver. The aid will take the form of two direct grants totalling €26.7 million.

The new refinery will offer a more sustainable, efficient and lasting means to exploit and treat mineral concentrates from the Iberian Pyrite Belt, the geographical area with significant mining activity along the south of Portugal and Spain.

The project is expected to generate benefits in terms of job creation, training and retention of skilled workforce.

The Commission’s assessment

The Commission assessed the measure under EU State aid rules, in particular Article 107(3)(a) of the Treaty on the Functioning of the European Union (‘TFEU’), which allows aid to promote the economic development of areas where the standard of living is abnormally low or where there is serious underemployment, and the Regional Aid Guidelines (‘RAG’).

The Commission found that:

• The measure will contribute to the economic development and to the competitiveness of a disadvantaged area. In particular, the measure will have a positive impact on employment by creating direct and indirect jobs in Gerena. The project will also enable the beneficiary to keep running its mining operations in the region for around 20 additional years.
• The aid has an incentive effect, as the beneficiary would not carry out the project without the public support.
• The measure has a limited impact on competition and trade within the EU. In particular, it is necessary and appropriate to ensure the transformation of CLC’s refinery, while contributing to the regional development.
• The aid is proportionate and limited to the minimum necessary to trigger the investment and will not exceed the maximum amounts of set out in Spanish regional aid map. 

On this basis, the Commission approved the Spanish measure under EU State aid rules.

Background

Europe has always been characterised by significant regional disparities in terms of economic well-being, income and unemployment. Regional aid aims to support economic development in disadvantaged areas of Europe, while ensuring a level playing field between Member States. 

In the RAG, the Commission sets out the conditions under which regional aid may be considered to be compatible with the internal market and establishes the criteria for identifying the areas that fulfil the conditions of Article 107(3)(a) and (c) of the TFEU (a- and c-areas respectively). On this basis, Member States notified their regional aid maps to the Commission for approval.

On 17 March 2022, the Commission approved Spain’s map for granting regional aid from 1 January 2022 to 31 December 2027, within the framework of the revised RAG. In March 2023, the Commission approved an amendment to Spain’s regional aid map.