Norway saves Arctic coal
A €60 million government loan will keep Norway’s Arctic coal company afloat for another couple of years.
Less than a week after Russian Deputy PM Dmitry Rogozin paid a surprise visit to Svalbard, leaving the Norwegian government in muddle over how to how to follow up the unwanted guest, Oslo grants Svalbard coal company SNSG a 500 million kroner loan.
The money will save the crisis-ridden local coal company and prevent a wave of dismissals and subsequent reduction of activity in the small Lonyearbyen society.
“I’m satisfied that the Norwegian Government contributes to a solution for the company, which is in a difficult situation. This is the right solution for Norway, the Svalbard community and the company. The mining company contributes to a vital community in Longyearbyen”, says Minister of Trade and Industry Monica Mæland in a press release.
The coal company in 2014 had a 537 million NOK deficit and depended on the government loan in order to avoid a bankruptcy. Over the last year, the company has dismissed about 100 employees and taken a string of efficiency-raising measures, local newspaper Svalbardposten writes.
It is the low prices in the market which have put the company in crisis.
The Store Norske is a 99 percent state-owned enterprise. It is with its about 350 workers a key employer in the archipelago. Production in 2013 amounted to 855,000 tons.
As previously reported, the hardships of the coal company is a key reason why the government in January this year announced that it will start working with a new whitepaper on the archipelago. “There are so many things happening at Svalbard at the moment”, Minister of Justice Anders Anundsen said in a recent parliament hearing. He confirms that the document will highlight the development of the Longyearbyen, the key local settlement, and that the future of the coal industry will be addressed.
