End of an era on Norway’s Svalbard

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The Arctic territory of Svalbard has long been administered by Norway, with coal mining as it major source of income. Now Norway’s government has formally decided against bailing out the Svalbard coal mining operations it owns once again, marking the end of one era and, hope most involved, the beginning of another that will continue to ensure Norwegian sovereignty.

It’s long been a paradox that Svalbard’s spectacular scenery in a sensitive Arctic environment has also featured coal mines that have generated carbon admissions and pollution. Now only the Gruve 7 mine will remain active, providing coal for local heating and energy, while the area’s two bigger mines will be permanently shut down. PHOTO: NFD/Trond Viken

It’s been an eventful week on Svalbard. Local officials were already grappling with the fatal crash of a Russian helicopter (an event that tested recently tense relations between Norway and Russia) when Norway’s government minister in charge of business and trade arrived to explain why the state won’t re-open two coal mines that have been the community’s largest source of employment.

Monica Mæland’s ministerial role makes her the ultimate boss of state-owned Store Norske Kullcompani, which in turn owns Store Norske Spitsbergen Grubekompani, the purely coal mining subsidiary. It ran out of capital earlier this year and thus needed another large bailout (NOK 600 million, or around USD 75 million at current exchange rates). After already pumping more than NOK 800 million into Store Norske over the past two years, Norway’s conservative coalition government did not include another bailout in the state budget it presented last month for next year.

Mæland was well aware she was walking into the proverbial hornet’s nest, and she was met by protestors carrying lit torches in the already-dark Svalbard afternoon.  She also met with Store Norske officials and employees.

Norway’s government minister in charge of business and trade, Monica Mæland (far right), met an unhappy group of coal miners and others on Svalbard earlier this week. She was there to try to explain why the government hasn’t provided any bail-out funds for its wholly owned Store Norske coal mining company, and instead will only finance the mines’ shutdown over the next three years. PHOTO: NFD/Trond Viken

“This is all about what we believe in for the future,” Mæland said after arriving in Longyearbyen, Svalbard’s largest community with around 2,500 residents. Many of them are coal miners and coal miners’ families, and they want the future to continue to include coal mining. Mæland and her political colleagues don’t, claiming economic realities simply can’t justify it any longer. Climate and environmental concerns have also finally played a role in the decision, several years after the United Nations itself urged Norway to shut down coal mining in the sensitive Arctic because of the emissions it generates. The issue has been controversial for years.

Mæland stressed the financial concerns, however, in her meeting with Store Norske workers. “We don’t think it would be a profitable investment to start up Svea and Lunckefjell again,” she said, referring to the two large mines that have been closed since the money to run them ran out. “It will lead to too much lost money.” Only limited mining operations are still underway, at the Gruve 7 mine just outside Longyearbyen. It provides coal for Svalbard’s own heating and energy needs.

Svein Jonny Albrigtsen, who has worked as a miner for Store Norske for 30 years, strongly opposes the mines’ permanent shutdown. He and several hundred coal mining colleagues, labour and business representatives took part in the torchlit protests and appealed for ongoing coal operations on Svalbard. They note how Store Norske has been active on Svalbard for more than 100 years, and has remained a lifeline for the community.

Hundreds of Svalbard residents, most of them coal miners who face losing their jobs, mounted a torch-lit protest during Trade Minister Monica Mæland’s visit this week week. Their signs stress to government officials that there’s no shame in changing their minds, and calling on them to maintain coal operations. PHOTO: NFD/Trond Viken

“Store Norske has been the guarantor that folks here have income and proper working conditions,” Albrigtsen told Norwegian Broadcasting (NRK). “If the coal jobs disappear, there’ll be a major change in the town. It’s important for folks to have stability in Longyearbyen.” He claimed that coal prices “swing up and down” and that industry around the world will still need coal: “I can’t see the reason for just letting the coal sit there when it’s already been cleared for being taken out.”

Mæland had some consolation to offer, claiming that the parent company Store Norske “will still play an important role in Longyearbyen, both through operation of Gruve 7 and in shutting down and cleaning up at Svea and Lunckefjell.” The government has committed NOK 700 million over the next three years for the removal of all coal mining infrastructure, to return the areas to the state they were in when coal mining began. That means the 45 people working at Svea and Lunckefjell won’t lose their jobs for at least another three years, but the plans also upset local residents who claim the communities at Svea and Lunckefjell will be destroyed. Gruve 7 will operate for at least another 10 years.

The leader of Store Norske’s board, Annette Malm Justad, stoically noted to newspaper Dagens Næringsliv (DN) recently that it was the government’s “privilege” as owner of the  company to make the final decision. The company’s outgoing chief executive, Wenche Ravlo, called the decision “sad.” She told DN she was glad the decision had finally been made, but said she was “disappointed” by it. She claimed her looming departure is not tied to the shutdown.

The protesters marched knowing full well there’s little if any chance of the government plans being stopped. The government has support for shutting down coal mining in Svalbard from several of the opposition parties in Parliament plus the non-socialist Liberals. “Coal operations on Svalbard have gone out of date,” Terje Lien Aasland of the Labour Party told news bureau NTB last week. “Not only are they very demanding purely economically, coal is also a major pollutant and being phased out over large parts of the world.”

Mæland thinks the future of Svalbard lies here in Longyearbyen, which has become an international gateway to tourism and Arctic research activity. Skeptics don’t think tourism can replace jobs lost in the coal business, which also has helped maintain a strong Norwegian presence on Svalbard’s main island of Spitsbergen. PHOTO: newsinenglish.no

Mæland said the future of Svalbard lies not in the mines but “in Longyearbyen.” It has become a hub for tourism and Arctic research, and efforts are underway to find more businesses to help diversify Svalbard’s coal-dominated economy. Longyearbyen has become a very international place in recent years, attracting adventurous workers from South Korea to Canada and not least all over Europe.

NRK reported on Friday that Longyearbyen now boasts workers from 41 nations, not least because residents of all the countries that have signed the Svalbard Treaty are allowed to live and work on the islands. Louise Green Jeppsson from Sweden told NRK she’s thriving in her hotel job in Longyearbyen. “Svalbard is a fantastic place,” Jeppsson said. “Folks are friendly and take care of one another.”

Hotel executive Stein-Ove Johannessen agreed. “It’s a really international milieu, fine and competent folks,” he told NRK. He noted that there are challenges, though. Permanent residents who’ve mostly been Norwegians have mixed feelings about the international influx. New state figures show they still make up 2,201 of Svalbard’s total population, but their share is dropping. The portion of non-Norwegians living on Svalbard has risen from 14- to 29 percent of the total population since 2009.

Svalbard Governor Kjerstin Askholt, known locally as Svalbard’s sysselmann, is keen to retain Norway’s authoritative presence on Svalbard, over which Norway has sovereignty under an international treaty. This photo was taken earlier this year on Norway’s national day on the 17th of May. PHOTO: newsinenglish.no

Kjerstin Askholt, who as Sysselmann on Svalbard holds its top official post, said it’s important to follow the consequences of how the make-up of Svalbard’s population is changing. “It’s important that it remains in line with what Norway wants,” she said, since Norway holds administrative responsibility. That’s also why it’s so important to create new jobs to replace those lost in coal mining. “Everyone must have work and be able to take care of themselves in order to live in Longyearbyen,” Askholt said.

Torbjørn Pedersen, a researcher at the University Nord in Bodø on the Norwegian mainland, is a former editor of the local newspaper Svalbardposten. He believes the internationalization of Svalbard can make it difficult to convince the rest of the world that Svalbard is run by Norway and subject to Norwegian law, a point made clear once again during this year’s Constitution Day celebrations on the 17th of May.

“Norway formally has full sovereignty over Svalbard, but many think it’s international and that sovereignty is unclear,” Pedersen told NRK. Shutting down the mines will have great consequences, he thinks, if only for Norway’s physical presence on Svalbard at a time when the EU is challenging Norway’s claims to the seafloor around Svalbard and Russia is often unhappy about how Norway runs Svalbard. Relations between the Norwegian-dominated community in Longyearbyen and the Russian community in Barentsburg, however, have traditionally been friendly and cooperative.

Asked whether the shutdown of coal mining marks the beginning of the end for Store Norske, its board leader Justad told DN that she didn’t know how to respond. “It is, at any rate, the end of an era.”

newsinenglish.no/Nina Berglund