Arctic coal company needs support says Norway

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Longyearbyen (pictured above) is the largest settlement on Svallbard. (Thomas Nilsen/The Independent Barents Observer)
Longyearbyen (pictured above) is the largest settlement on Svallbard. (Thomas Nilsen/The Independent Barents Observer)
Norway’s Government is asking Parliament to support Svalbard coal company Store Norske with loans and aid.

Minister of Trade and Industry Monica Mæland proposes giving Store Norske NOK 112 million (€11.7 million) this year and NOK 144 million (€15 million) the following three years, plus a loan of NOK 205 million (21.4 million).

The money should be used to enhance operations in Mine 7 and to put the mines in Svea and Lunckefjell in pausing and maintenance position.

Geopolitical considerations

The state-owned coal company has been in a crisis since the latter half of 2014 due to a sharp drop in coal prices. For Norway, it is of geopolitical importance to maintain business on Svalbard. Longyearbyen is the largest settlement, while the dormitory town of Svea houses most of the coal miners.

“It is important to maintain activity and settlement on Svalbard”, Mæland says in a press release. “The Svalbard society is in a difficult situation. I am glad we have managed to find a solution that will double the number of jobs in Mine 7. Unfortunately there is no market basis for mining in Svea and Lunckefjell. Pausing operations there is important to give the local society time to establish new industries while we maintain the ability to re-open if the market picks up again.”

The funding suggested by Monica Mæland is much higher than her ministry was willing to give to the local community in December 2015 when they offered to give NOK 110 million to help establishment of new industries on the archipelago.

Related stories from around the North:

Canada:  Canadian province of Quebec announces plan for northern development, Eye on the Arctic

Finland:  Finland ‘shot itself in the foot’ creditor says of mining company saga, Yle News

Greenland:  Greenland pioneers Arctic tourism & mining, Cryopolitics

Norway:  Mining co. on bankruptcy brink in Arctic Norway, Barents Observer

Sweden: Relocation of Arctic town underway in Sweden, Radio Sweden

United States:  Alaska – Judge temporarily halts EPA process on Pebble Mine, Alaska Dispatch

 

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