Coal mining in Spits­ber­gen under pres­su­re

The Nor­we­gi­an mining com­pa­ny Store Nor­ske Spits­ber­gen Kull­kom­pa­ni is set under pres­su­re by the per­ma­nent­ly low world mar­ket pri­ce for coal. Sin­ce 2012 the Nor­we­gi­an coal mining in Spits­ber­gen is a loss-making busi­ness. Fal­ling pri­ces encoun­te­red infe­ri­or qua­li­ties and rising cos­ts in the main mine Svea Nord near Sveagru­va. Here mining is coming towards an end and is now run in the mar­gi­nal parts of the coal seam (see also Spitsbergen-Svalbard.com news Store Nor­ske: black gold yields red num­bers from May 2013).

The new mine at Lun­ckef­jel­let, ope­ned offi­ci­al­ly in Febru­ary 2014, was sup­po­sed to pro­du­ce reli­ef. But at a cur­rent avera­ge coal pri­ce of 75$ per ton Lun­ckef­jel­let is not pro­fi­ta­ble eit­her. The pri­ce is at least 10$ per ton less than Store Nor­ske needs to avo­id ope­ra­ting at a loss. When the new mine was plan­ned, the com­pa­ny even cal­cu­la­ted with a pri­ce 40% abo­ve the cur­rent level. As the total amount of coal expec­ted at Lun­ckef­jel­let is rela­tively low, com­pared to Svea Nord, the new mine will only be dri­ven until 2018 and it is not expec­ted that the coal pri­ce will rise in the next few years.

Recent­ly Store Norske´s manage­ment descri­bed the situa­ti­on as serious for the first time. In the long run the com­pa­ny will react with cost reduc­tions which also means a reduc­tion of staff. In the short run it was neces­sa­ry to hire 30 addi­tio­nal miners to extra­ct coal from mar­gi­nal parts of the old mine Svea Nord, mea­ning an inte­rim increase of ope­ra­ting cos­ts. Facing the cur­rent con­di­ti­ons it is get­ting ques­tionable if coal mining in Spits­ber­gen will have a future at all. New pro­jects like Ispal­len and Ope­raf­jel­let are chal­len­ged.

Both Store Nor­ske, which is 99.9% owned by the Nor­we­gi­an sta­te, and the local govern­ment in Lon­gye­ar­by­en are awa­re of the eco­no­mic and social rele­van­ce of the com­pa­ny for the small com­mu­ni­ty of only 2000 inha­bi­tants. If coal mining in Spits­ber­gen will be redu­ced or even sus­pen­ded it will affect not only tho­se who work for the mining com­pa­ny. A lar­ge num­ber of other jobs in Lon­gye­ar­by­en are direct­ly or part­ly con­nec­ted to the mining busi­ness.

Curr­ent­ly, Store Nor­ske is in a dia­lo­gue with their employees, the Nor­we­gi­an sta­te and the ban­kers to ensu­re fur­ther ope­ra­ti­on in 2015.

Source: Sval­bard­pos­ten

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