Property for sale in Recherchefjord

Posted on 13. May 2024 by Rolf Stange

It is almost tempting to write “Spitsbergen about to become Chinese”, but no, that is not the level we are working at here. That would be nonsense, although you might almost have believed it, looking at some recent headlines.

Property in Svalbard: that’s how it started

We have to go back to the beginning of the 20th century for a moment. Spitsbergen was no man’s land and companies, many small and a few larger ones, came and claimed rights, thinking mining would be a way to make a fortune up north. Most companies were far too small and did not have the experience or the funds to start mining at industrial level, but some did, such as John Munro Longyear’s Arctic Coal Company which founded Longyearbyen (then known as Longyear City) in 1906.

60 sqare km of property are now on offer in Recherchefjord – for 300 million Euro.

Many of the small companies quickly ran out of money, and some of them sold their claims to others. Many of the claims were overlapping. It took years to sort this mess out, a process that was required to be finished before the Spitsbergen Treaty could enter force in 1925.

Companies continued to sell their various properties also after 1925, and so did successors and heirs. Often it had become clear that there would never be any mining or other kind of land use before land or claims would be sold. Usually the Norwegian state secured properties and mining rights to get Svalbard’s land areas under control. By now, 99 % of Svalbard’s ground are owned by the Norwegian government. The Russian state-owned mining company Trust Arcticugol owns some smaller land areas in Isfjord (Barentsburg, Colesdalen/Grumant, Pyramiden, Erdmannflya) – and then there is Kulspids AS, one of many companies that were founded in the early 20th century to explore and exploit mineral resources.

Kulspids AS

Kulspids AS secured a land area of 60 square kilometres in inner Recherchefjord. Asbestos is one mineral found in the area and mining was attempted, but not successful. Kulspids AS still exists and still owns the property, which today’s owners of the company now want to turn into money, as was initially reported by Bloomberg. The story was quickly picked up by various Norwegian media including NRK.

“All bidders welcome” is the seller’s message, addressing individuals, companies and governments alike. It is pointed out that also governments such as the ones in China or Russia could buy the property, if a price could only be agreed on. And of course the geopolitical significance of arctic areas in general is also highlighted by Kulspids AS representative.

Geopolitical significance – or not

Whatever the geopolitical significance actually might include is, hower, unclear: any new owner, as well as the current one, has to comply with the Svalbard environmental law and the Spitsbergen (Svalbard) Treaty. This makes pretty much any kind of land use impossible. No future owner, including the government of China (or Russia, for that sake) would legally be able to build a hotel, a harbour, a research station, a mine or a military base. Nobody would even legally be able to drive a snow mobile without special permission from Norwegian authorities, which would be difficult to get. The geopolitical significance of the property beyond prestige is hence doubtful.

Considering the above, researcher Andreas Østhagen of the Fridtjof Nansen Institute recommends the Norwegian government to remain calm and not make a very expensive panic purchase, according to Svalbardposten. The minimum bid is set at the proud amount of 3.5 billion (yes, billion!) Norwegian kroner – currently about 300 million Euro. For comparison: at the latest comparable transfer in 2014, when a large property on the north side of Adventfjord was sold, the price was near one tenth of today’s minimum bid. Even then, the price was controversial – and mining or other land use would at least in theory have been possible, considering the property sold in 2014 was not part of any national park or other specially protected area.

Hence, it seems fair to assume that pointing at any geopolitical or other importance of the property in Recherchefjord or at potential buyers such as China primarily serve as a tool to push the price and to increase the pressure on the Norwegian government to secure the land for Norway. Nothing is so far known about any buyers actually being interested or any serious bids.

Meanwhile, a spokesperson of the Norwegian government said that the government had actually made an offer in the past which was considered generous considering that the property does not come with any land use potential. The offer was turned down by Kulspids AS. It was also said that because of an old contract between the government and Kulspids AS, the property can not be sold without government approval.

In any case, this is the very last major land area in Svalbard still in private hands. Once it is sold, the time of major properties changing from one owner to another will be over. There are very few other, small private properties in Svalbard. In those cases where for example a private person owns a house in Longyearbyen, the property as such does not include the land the house is standing on – this is already government property.

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