Swedish state-owned energy giant Vattenfall said Monday it has reached a deal to sell its German coal operations, employing 8,000 people, as it moves away from activities blamed for climate change.

Vattenfall said it would sell its German lignite, or brown coal, business -- open cast coal mines and two power plants close to the German-Polish border -- to Czech operator EPH.

The coal operations represent about one-tenth of Vattenfall's power production in Germany, where it is the third-largest energy supplier.

"This divestment of our lignite assets is good strategically but also financially given current and expected market conditions," said Vattenfall chief executive Magnus Hall.

"We are now accelerating our shift towards a more sustainable production. The sale means more than 75 percent of our production will be climate neutral compared to about 50 percent today," Hall said.

Vattenfall said the sale of the coal business would have a negative impact of 22-27 billion Swedish kronor (2.4-2.9 billion euros/$2.7-3.3 billion) on its second-quarter results, but the hit would have been larger if it had waited longer.

The sale of the coal assets drew few bidders.

Another Czech company, CEZ, withdrew afer expressing initial interest.

Greenpeace, too, had tried to bid for the coal operations with the intention of closing them down. But the environmental group said in November it had been barred from bidding because Citigroup, in charge of the sale, judged it had no intention of making a financial bid.

There is growing resistance to fossil fuels in Germany, where public subsidies of renewable sources of energy are making coal-fired energy less profitable.

- 'Irresponsible' to sell -

Non-governmental organisations and environmentalist groups criticised the sale.

Jan Kowalzig, climate expert at Oxfam, slammed it as an "irresponsible decision" on the part of Sweden, which should have shut down the operations instead.

The Swedish government, a coalition of environmentalist Greens and Social Democrats, had "betrayed" its international commitments, Kowalzig said, urging Stockholm, which has still to give its green light, to block the deal.

Swedish industry minister Mikael Damberg, for his part, said: "We will examine the transaction... and probably respond within a few months."

EPH, a major player in eastern Europe, already owns another German coal producer, Mibrag.

Annika Jacobson, head of Greenpeace Sweden, described EPH as a "Czech risk capital group who want to relaunch coal in Europe and have plenty of skeletons in their cupboards".

The group's head had been named in the recent Panama Papers tax-evasion scandal, even if the group denied any wrongdoing, Jacobson said.

Vattenfall's plans to sell the operations already raised concerns in Germany since the mines are in the east, where unemployment is higher than in the rest of the country.

Vaattenfall is one of the biggest employers in the region.

The IG BCE labour union for the sector said it expected EPH to draw a "corporate strategy that recognises the importance of the east German brown coal industry for social stability in the region".

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