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The likelihood of Store Norske’s survival and the extent to which it may need to pursue ventures other than coal mining will likely be revealed Tuesday night when Parliament is scheduled to cast its first vote related to an emergency bailout loan the company says is necessary to continue operating beyond June.
In addition, the Ministry of Trade, Industry and Fisheries may announce if it will recommend the loan to lawmakers as soon as Friday.
Debate about the company’s future – and Svalbard’s as an economic and strategic asset – began Tuesday in Parliament with a proposal by the Green Party essentially requesting coal mining not be considered a part of a new strategic plan being hastily drafted for the archipelago. A revision of the “white paper” was announced in January shortly after Store Norske requested emergency loans of 400 million kroner to continue mining and 50 million kroner for restructuring to allow expansion into other industries such as infrastrurcture.
“Coal mining was the basis for this settlement,” the Green Party’s resolution states. “In recent times have other livelihoods have come such as tourism, environmental management and research. It is important to facilitate good management of the archipelago.”
A sharp drop in coal prices last year resulted in Store Norske suffering a record loss of 537 million kroner. As part of its restructuring plan the company has laid off about 100 of 340 employees – which followed a downsizing of about 60 employees 18 months earlier – and has scaled its mining operations back by half for 2015.
The Green Party’s resolution, if approved, “asks the government to present a case for the further development of the Svalbard community with emphasis on sustainability, environmental research, an energy base and new livelihoods.”
The Green Party has previously advocated an end to all coal mining in Svalbard, but a majority of Parliament has repeatedly supported its continuation despite recently voting to rid the government’s oil wealth fund of investments in greenhouse gas polluters. Most major parties have also expressed general support for the emergency loan requests without making commitments to specifics.
“I believe we will get the loan,” said Longyearbyen Mayor Christin Kristoffersen, who has led the local political effort to lobby approval of the loans. “We have a surplus (of votes) in Parliament.”
She said she expects the ministry to issue its decision about endorsing the loans “either this Friday or next Friday” and a vote by Parliament by the end of this month, but she still has concerns about whether terms limiting the company’s operational possiblities will be imposed.
Numerous complications – include the expectation the decline in coal prices is likely to be prolonged and the Norwegian government suffering its own financial crisis due to a similar crash in oil prices – are likely to affect what terms, if any, are placed on providing financial assistance. The loans are seen as necessarily to help allow for other financial assistance sought by Store Norske including bank refinancing of loans.
Many lawmakers and other top Norwegian officials have cited the need to maintain a strong Norwegian presence in Svalbard, which is seen as a vital strategic asset due to Arctic nations are increasingly battling over oil and other rights in the far north, which the Green Party acknowledges is a necessary consideration.
“Svalbard is an integral part of our northern areas and one of our key strategic areas,” the resolution states. “The committee wishes to emphasize that the presence of Svalbard contributes to a credible and effective management of Norway’s large land and sea areas.”
Debate before Tuesday’s scheduled vote may also focus on previous suggestions by the Green Party the amounts of the two loan be adjusted, with a higher ratio of the 450-million-kroner total going toward restructuring.
Store Norske initially said it needed the loan to continue operating beyond March, but negotiations with creditors and subcontractors will now keep the company solvent until June, according to Svalbardposten. Frustration is being expressed by miners and local political officials because Parliament was expected to take up the loan request in March.
“The ministry is still working on considering the request from the board and it would be wrong to go into the individual elements of the assessments that are now done,” Trond Viken, a spokesman for the ministry, wrote in an e-mail to the newspaper. “We are aiming to come to a conclusion relatively soon – as the situation dictates.”
(Editor’s note: The original version of this article stated the vote on the resolution was scheduled Wednesday. It has been updated to reflect when the vote actually took place).
