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Home* News and Stories → Norwegian coal mining in Spitsbergen currently not profitable

Norwegian coal mining in Spitsbergen currently not profitable

The Norwegian mining company Store Norske is currently not doing well. The company, which is by more than 99 % state-owned, will again present a loss as this year’s result.

Mining in (or near) Longyearbyen is only on an almost symbolic level in mine 7 in Adventdalen. Sveagruva, or Svea Nord to be precise, has given the company good years in the past, but it already feels like a distant past looking at today’s figures. Svea Nord has its best days definitely already behind it. Prepared for mining is a new mine at Lunckefjellet, north of Sveagruva, but the seams there are estimated to last only for 4-5 years of mining and profits are doubtful given current world market prices. Further coal occurrences are explored, for example at Bassen mountain northeast of Longyearbyen, but it is uncertain if a new mine is politically viable.

In 2012, Store Norske finished with a minus of 234 Norwegian Kroner (near 29 million Euro), and 2013 will not be much better. It employs still about 300 people. Earlier in 2013, 70 lost their jobs, not including those in subcontracting companies who depend on Store Norske. This shows how important the company still is for Longyearbyen, where a good 2000 people are living.

Store Norske is using both credits and capital built up during better years to finance investments such as the Lunckefjellet mine. The parliament has made it clear that the company can not expect further public funding. A while ago, Store Norske has bought the majority of shares of the logistics supplier Pole Position. Possibly a hint towards a future beyond coal mining?

The mining in Svea Nord is on the decrease. Lunckefjellet is ready for mining a few miles further north.

Svea Nord

Source: NRK

last modification: 2014-07-01 · copyright: Rolf Stange