13. 4. 89 Official Journal of the European Communities No L 101/35 COMMISSION DECISION of 30 March 1989 authorizing the agreements on supplies of solid fuels to six steelworks by Ruhrkohle AG (Only the German text is authentic) (89/248/ECSC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Coal and Steel Community, and in particular Article 65 thereof, Having regard to the application submitted by Ruhrkohle on 4 November 1988 in its own name and in the name of - the steelworks concerned, Whereas : . 1. THE FACTS A. Steelworks agreement 1969 (1) With effect from 1 January 1969, Ruhrkohle AG @ (RAG) concluded with the steelworks Salzgitter Hiittenwerk - AG, Hoesch AG, Fried. Krupp Hiittenwerke ~ AG, Ilseder Hiitte, August Thyssen-Hiitte- AG, Mannesmann AG, Rheinische Stahlwerke - and - Klockner-Werke AG * supply agreements in which the steelworks-undertook to obtain their-solid fuel requirements for their plants in the common market from RAG. In the agreements, RAG undertook to- supply such requirements - (steelworks agreements). The steelworks agreements were part of the measures which were taken in 1969 by 23 German mining companies Government of the Federal Republic of Germany and which led to the establishment of RAG. The relevant undertakings (parent companies) gave up their mining assets and transferréd them to RAG, in return for which they acquired shares in RAG in proportion to the value of the physical fixed assets transferred - to. it. In the case of: the mining companies which, at the time when RAG .was established, also operated steelworks, the giving-up. of their mining assets meant that they lost their- own coal supply used in their steel production. So: as to ensure the continuation of these traditional links in the manner and to the extend that they would have developed without the transfer of mining assets to RAG, identical steelworks agreements were concluded between RAG and the relevant parent companies. in- agreement with the- @). “) ©) The main provisions of the agreements are as follows : RAG charges such customers a contract price determined in accordance with a uniform procedure. The contract price takes account of the fact that imports of cheap coking coal into the Federal Republi¢ from outside the Community are restricted by law. Consequently, so as to avoid competitive diadvantages for. the parties to the steelworks -agreements wvis-d-vis the steel industry in other Community countries, the contract price is - set in such a way that it results in cost prices for- the parties to the steelworks agreements that are equivalent to the cost prices they would have had to pay if they too imported coal from outside the Community. The same applies in the case of blast- furnace coke taking account of processing costs in the coke-ovens. Both sides- start from the assumption in these arrangements that™ the difference between RAG’s production costs and the competitive price is covered by State aid. RAG has reserved the right to operate the steelworks agreements appropriately if the system for covering the difference between production costs and the competitive price through aid no longer applies or is no longer sufficient to cover the total amount. Coking coal supplies would be reduced or cease whereas coke supplies would continue with coke made from. third-country- coal. RAG is required to grant the -parties to the agreements ‘most-favoured-customer -treatment. The steelworks must not. have coking carried out against payment by other undertakings or hire any coking capacity. They must clear the creation or extension of their own coking capacity with RAG and reach agreement with RAG on any financial consequences resulting from this. The steelworks - agreements were concluded for a period of 20 years and could be terminated only on 31 December 1988, subject to-five years’ notice being given. They were to be-extended by a year at a time if notice to terminate was not given five years before their expiry. When RAG was set up, the steelworks agreements formed an integral part of the merger plan which was authorized by the Commission on 27 November 1969 under Article 66 (2) of the Treaty.