Costly overtime: Store Norske Store Norske in talks with bank to avoid more layoffs as government misses crisis response deadline


That the government’s failure to respond by a “drop-dead deadline” isn’t yet fatal is what passes for good news these days at Store Norske.

The coal company remains in discussions with DNB about a loan and line of credit the bank is providing that is keeping the company alive – if far from healthy – as it awaits word on whether it’s future will be catastrophic or merely tragic.

Store Norske, which is requesting 285 million kroner from the Norwegian government to put mining operations at Svea and Lunckefjell on hold for up to three years, said it needed a reply by Monday to satisfy the bank. But Store Norske Administrative Director Wenche Ravlo told Svalbardposten this week the company is now engaged in almost daily talks with DNB, which hold company infrastructure and produced coal as collateral.

“It is now about finding a solution so that the bank will pay less when operations are on hold,” she told High North News in a separate interview, adding she believes the government’s answer will come before Christmas.

The government’s delay is causing widespread anger among the city’s political and business leaders, and making some of the mining company’s remaining 230 employees increasingly uneasy. Store Norske’s proposal would result in 100 remaining employees by next summer, down from 450 several years ago. But only about 50 employees would remain if the government refuses the funding request – which some employees say is now feasible – although Longyearbyen Mayor Arild Olsen said this week he continues to believe the government will approve the company’s request.

The government did announce last week it is providing a total of 50 million kroner for infrastructure upgrades by the city and job development through Innovation Norway. But Olsen and other leaders are expressing concern about whether the agency is the most efficient means of allocating funds.

Also, two companies, Siva and Sintef, reaffirmed this week they’re interested in continuing to use Svea for Arctic infrastructure and development research. Such activities, along with tours of the mining settlement scheduled to start in January, are possible ways the site may remain viable after coal mining ends