The European Commission (EC) on 9 May launched an investigation into whether public support received by Romania's National Uranium Company (Compania Nationala a Uraniului SA - CNU) conforms to European Union (EU) state aid rules.
CNU operates at two sites: a uranium mine at Crucea-Botusana in the northeast of Romania and a mill and processing plant in Feldioara in Transylvania. Until 2016, its primary customer had been Nuclearelectrica, the operator of Romania's two Candu reactors at Cernavoda. However, Nuclearelectrica cancelled its contract with CNU and instead signed a uranium procurement contract with Cameco, which offered lower prices.
Romania notified the EC in June 2017 of a restructuring plan for the company, which had been economically impacted by the loss of its primary customer. The Romanian government had made an urgent rescue aid loan of some €13.3m ($15.6m), which the EC temporarily approved in September 2016. However, under EU rules, state aid may be granted only for six months, after which it must be reimbursed or a restructuring plan submitted to the EC for approval.
Romania's restructuring plan calls for about €95m to support CNU in the form of grants, subsidies, debt write-off and debt-to-equity conversion. The idea is to extend this loan and grant €16.2m to support investments for modernisation of CNU. It will also write-off public debt of €16.6m, convert CNU's public debt of €2.9m into shares held by the state, and give CNU an operating subsidy of €45.8m to cover the difference between production costs and market prices during the period of restructuring.
The EC said that EU state aid rules only allow state support for a company in financial difficulty under specific conditions. "At this stage, the Commission has doubts that the planned restructuring aid is in line with these conditions," the EC said in a statement. The EC will examine whether the proposed restructuring plan could restore CNU's long-term viability without continued state aid, and will also determine whether CNU or market investors are contributing enough to the restructuring costs.
