Get off your assess: Businesses out of patience, say government’s delay in Store Norske crisis hurting them

minedarkness

There’s only so much time to figure out how to rescue a drowning man.

That, writ large, is the scathing message released this week by the Svalbard Business Association, stating the government’s delay in deciding its plans for Store Norske in the wake the company’s coal crisis is leaving too many residents gasping for air.

“Our patience has ended,” wrote Terje Aunevik, the association’s director, in a press release posted on the organization’s Facebook page. “The uncertainty that is prevailing is because of a vacuum of action and a clear signal about the direction of Longyearbyen is creating turbulence.”

A survey of the association’s members shows more than 40 percent have put investments on hold, 50 percent expect a drop in sales and nearly 10 percent expect a major drop, Aunevik wrote.

But the government, which owns Store Norske and is being asked by the company’s board of directors to provide funding to maintain some operations, isn’t ready to wade in yet.

“This is an extensive and important issue, and I will not now comment about when a resolution concerning Store Norske will be in place,” said Norwegian Trade and Industry Minister Monica Mæland, in an interview with NRK. “The issue has high priority and we are working as quickly as possible.”

Her statement differs little than those since Store Norske’s board voted in early September to layoff all but 100 of the company’s 270 employees by next summer – adding to about 150 additional layoffs that have occurred during the past couple of years.

The board’s decision, if enacted, would halt mining operations at Svea and Luckefjell for up to three years in the hope coal prices recover, while doubling the relatively small level of production at Mine 7. The board is requesting about 300 million kroner to maintain Svea and Luckefjell during the interim, and says up to 50 more layoffs will occur if the funding is not approved.

Store Norske may be forced to begin those additional layoffs if the government doesn’t make a decision by Nov. 23, Svalbardposten reported this week. Aunevik, in his statement, emphasized the government’s indecision essentially is a decision in itself.

“This is not about discussing yes or no to coal mining, it is that we must know what our situation will be to the future. If the owners continue to push the decision into the future the alternative of a forced liquidation will fast become a reality all by itself – for who wants to work for a company if you do not know where it is tomorrow?”

The business association’s survey also shows locals are willing to make adjustments in a transition and seek new opportunities in areas such as tourism, research and education, Aunevik wrote. But the government’s inaction is harming all industries, not just coal.

“There is energy and the will for development here, there is established a very good basis for cooperation and capability for joining forced. But this energy I fear will gradually disappear if there do not quickly come signals of direction. The uncertainty that prevails makes society lose skills, development power and resource persons. It can quickly become a very negative spiral ”

The more jobs lost, for example, the greater the likelihood the number of flights between Longyearbyen and the mainland will be reduced, which would negatively impact tourism, he noted.

The government has long claimed Svalbard is an area of key strategic importance, one more reason officials need to determine what the archipelago’s identity in the future will be, Aunevik wrote.

“In that perspective, this decision is too important to be in Store Norske’s boardroom. It is actually larger than it may be for the ministry of industry as well, because this is a national concern.”