Coal mining not pro­fi­ta­ble: Store Nor­ske cuts 100 jobs

The Nor­we­gi­an coal mining com­pa­ny Store Nor­ske Spits­ber­gen Kul­kom­pa­ni (SNSK) will redu­ce the num­ber of employees as a reac­tion to their loss-making mining acti­vi­ty in Spits­ber­gen. Rapidly fal­ling world mar­ket pri­ces for coal encoun­te­red rising cos­ts for mining in the mar­gi­nal parts of the old mine Svea Nord and for the explo­ita­ti­on of the new mine at Lun­ckef­jel­let. At an avera­ge coal pri­ce of 75$ per ton the com­pa­ny curr­ent­ly loo­ses 10$ with every ton being extra­c­ted (see also Spitsbergen-Svalbard.com news Coal mining in Spits­ber­gen under pres­su­re from Novem­ber 2014).

Under high pres­su­re Store Nor­ske eva­lua­tes seve­ral pos­si­bi­li­ties of reac­ting to this eco­no­mic cri­sis in order to save coal mining on Spits­ber­gen for the near future. It has alre­a­dy been deci­ded that ca. 100 of the 340 jobs at Store Nor­ske will be cut as soon as pos­si­ble. The decis­i­on was published in the end of Novem­ber and in the mean­ti­me the first group of 30 employees has been infor­med, that their con­tracts will run out. It is esti­ma­ted, that all in all ca. 600 jobs on Spits­ber­gen are direct­ly or indi­rect­ly depen­ding on Nor­we­gi­an mining. In addi­ti­on to the employees of Store Nor­ske the­se figu­res main­ly include jobs at sup­pli­ers and ser­vice com­pa­nies, in the tra­ding sec­tor and at public ser­vicers, as school and kin­der­gar­ten. If the Nor­we­gi­ans had to sus­pend coal mining com­ple­te­ly, this would have a very strong impact on the rela­tively small com­mu­ni­ty of only ca. 2000 inha­bi­tants in the city of Lon­gye­ar­by­en. In 2013 Store Nor­ske did alre­a­dy cut 80 jobs, one pos­si­ble reason for the mode­ra­te popu­la­ti­on decli­ne in Lon­gye­ar­by­en after a lon­ger peri­od of growth. A signi­fi­cant expan­si­on of the two other strong eco­no­mic sec­tors, tou­rism and rese­arch, as a com­pen­sa­ti­on for a pos­si­ble sus­pen­si­on of coal mining can not be expec­ted in the short term.

Under the­se cir­cum­s­tances it is not only the manage­ment of Store Nor­ske but also the local govern­ment in Lon­gye­ar­by­en which is con­cer­ned and inten­si­ve­ly occu­p­ied with fin­ding solu­ti­ons to ensu­re coal mining on Spits­ber­gen. The­r­e­fo­re, mem­bers of Store Nor­ske as well as the mayor of Lon­gye­ar­by­en, Chris­tin Kris­toff­er­sen, recent­ly tra­ve­led to Oslo for nego­tia­ti­ons with ban­kers, the Nor­we­gi­an govern­ment and the par­lia­ment.

Source: Sval­bard­pos­ten

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