By Gianluca Baratti

September 18, 2017 - Several Spanish coal companies could be forced to close in the coming weeks because of the lack of demand from domestic coal-fired plants, coal mining companies group Carbunion said in a statement Monday.

• Generating groups failing to buy domestic product

• Group also cites failure to adhere to sector plans

• Compostilla plant has seen worker protests

The group said the situation has become critical for these companies amid a failure from authorities to adhere to the 2013-2018 sector plan, the national closure plan for coal mines and, notably, the failure of domestic generating companies to buy domestic coal.

These factors have led to "serious problems for coal producers, resulting in a number of bankruptcies and restrictions to work hours," Carbunion said.

"The failure to guarantee continual supply of domestic coal to thermal plants, due to a failure to sign the necessary contracts with them in the last three months is leading directly to halted coal production in most Spanish mines," the group added.

This comes despite an uptick of 43% for coal-fired generation during the year to date amid a drop in renewables output, particularly hydro.

However, 85% of the coal used for power generation is from imported sources, the group said, with the other 15% largely accounted for by domestic coal that is located close to the thermal plants.

A number of power plants in Spain use a blend of imported and domestic coal, but in the last three years have made a notable shift to imports, generally from South Africa, Indonesia, Russia, Australia, Colombia and the US, partly after the end of state subsidies.

The situation has resulted in a flare-up in the last couple of months between local coal company Astur Leonesa and Spain's largest operator of coal-fired power plants Endesa.

The issue has become centered on the 1.3 GW Compostilla plant where workers from the coal company, already in a process of administration and facing liquidation, have attempted to block deliveries of imported coal to the site.