* RWE's western German Garzweiler mining can continue
* Ruling safeguards role of brown coal burning for
* Local residents' concerns must be addressed earlier on
(Adds comments from RWE, financial analyst, lawyer, share
KARLSRUHE, Germany, Dec 17 Germany's highest
court said the rights of citizens must be respected when it
comes to brown coal mining, but stopped short of interfering in
an activity that represents one of the most profitable sources
of power generation for RWE.
A widely awaited ruling on Tuesday by Germany's Federal
Constitutional Court said that any relocation and compensation
for residents near RWE's Garzweiler mine, which could continue
operating up to 2045, should be worked out early, so as to allow
citizen's concerns to be dealt with appropriately.
But brown coal mining itself and the use of domestic raw
materials overall was not in question, the court said, adding
these matters were up to the government.
"Brown coal mining secures a sufficiently legal and
sustainable public benefit," it said.
A negative ruling on the mining sector could have spelled
early closure for the mine and an important structural change to
the power generation mix for utilities.
RWE operates thousands of megawatts of brown coal-to-power
capacity in its core North-Rhine Westphalia region and needs
local supplies to fuel them, producing between 35 and 40 million
German brown coal, also mined by Vattenfall in
eastern Germany, supplies 25 percent of the country's power
generation. Brown coal mining has come under fire from local
residents, some of whom will be relocated in future expansion
programmes, but also from environmentalists for the high carbon
dioxide pollution it emits during burning.
An RWE spokeswoman said the firm welcomed the decision as it
gave people in the Garzweiler mining region certainty that
mining would continue.
RWE in October denied a report it was considering the early
closure of the mine, though it is pressing ahead with
restructuring measures due to the unprofitable wholesale market
Garzweiler feeds raw material to RWE's power plants G and F
at Neurath, among others, which since opening in 2012 have been
among the world's biggest and most modern brown coal-to-power
blocks with a joint capacity of 2,100 megawatts.
"If this had turned out negatively, RWE would have had a
problem because the Neurath blocks ... were built (to be
operated) for 30 to 40 years," said Roland Vetter, head of
research at London-based CF Partners, an energy advisory,
trading and investment firm.
"It would have hurt if these blocks had been stopped, or
forced to run at less than full capacity after a few years."
But a lawyer who has represented property owners affected by
mining, Michael Terwiesche, said that in his view the rights of
local people had been strengthened by the decision, as they
would be heard before firms even filed planning applications.
"It will get more difficult, more protracted, and more
expensive for mining firms to carry on," he said from his
RWE shares were 0.8 percent down while the blue chip DAX
index lost 0.2 percent.
(Reporting by Norbert Demuth, Tom Kaeckenhoff, Vera Eckert;
Editing by Mark Potter and David Evans)