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Home* News and Stories → Coal mining not profitable: Store Norske cuts 100 jobs

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.

Old coal mine: has seen better days in the past (Hiorthhamn-mine opposite Longyearbyen).

Coal mine near Longyearbyen (Hiorthhamn)

Source: Svalbardposten

last modification: 2014-12-12 · copyright: Rolf Stange