This may sound familiar: Russian and Chinese companies are among those interesting in buying the coal mining rights to a large tract of land near Longyearbyen, an attorney representing the holder of those rights is telling Norway’s government and media.
Unsurprisingly, headlines appear nationwide Wednesday about the prospect of a major advisory gaining a potentially large economic/political foothold in Svalbard after it was first reported by NRK. But the coverage also noted the issue has surfaced repeatedly beginning in 2014 when the family-owned company that owned the land announced it planned to sell it – and how that ended up being what many called essentially a “ransom demand” to pressure Norway’s government into paying a heightened price to buy the land.
Norway’s government did indeed agree spend 300 million kroner to buy the 218-square-kilometer tract known as Austre Adventfjord in 2017, but that purchase didn’t include the mining rights to the land, one of two privately held land tracts in Svalbard prior to the sale. Erling Lyngtveit, a retired attorney who still represents the former landowners, told NRK he informed Norway’s Ministry of Trade and Industry the company interest has been expressed by numerous parties including foreign companies about purchasing the rights.
“We think it most fair to give the state an offer to find out if it is interested,” he told NRK. “If not, we have to assume that the state is okay with our selling these rights off to foreign interests.”
Naturally, there are a few complications, beginning with whether mining the coal can be truly profitable given the widespread doubts about the industry’s future among global investors.
Store Norske Administrative Director Jan Morten Ertsaas told the news network the company declined to buy the rights, stating existing operations at Mine 7 are considered more promising and Austre Adventfjord’s prospects are questionable because “it is very difficult to achieve profitability in coal mining based on current prices and framework conditions.”
But a Russian or Chinese purchase may not be purely (or even significantly) about profit, since both countries are aggressively seeking to expand their Arctic foothold as climate change makes resource extraction in the north an ever more promising prospect.
“One can ask if it’s about some of the political reasons they will want to have such a business even if it does not become profitable, but it is pure speculation,” Arild Moe, a professor at the Fridtjof Nansen’s Institute who has researched Svalbard issues for decades, told NRK.
The mere possibility of Russia or China buying the rights was enough to prompt vehement protests from some in Norway, including an editorial in Verdens Gang that essentially detailed every “deplorable” deed by China, which has declared itself a “near-Arctic state” despite the geographically inaccuracy of that assertion.
“China, an authoritarian and undemocratic regime that pursues intense surveillance of its own citizens, that puts minority groups in concentration camps, that imprisons opponents, and suppresses free speech, must be met with firmness and resolve,” the editorial declares. “If the (Norwegian) government allows the Chinese to buy into areas where we have sovereignty, it will allow China to gain more influence at a time when the world needs the opposite of a stronger China.”
But Birger Amundsen, a journalist and author who’s been working intermittently in Svalbard since the early 1970s, suggested there is essentially no possibility of coal mining by any new owner – Norwegian or foreign, due largely to the declining global coal market and conditions in Svalbard that make competitive/profitable mining implausible.
In a lengthy analysis published on his Facebook page he noted regulations require a coal operator to perform 300 work days per year in order to retain the rights. Russia already has an existing mining operation in Barentsburg, which many have stated is for political foothold rather than economic purposes, and lacks the ability/finances to expand even in the area it has rights to. China, he added, “has never shown any interest in starting coal extraction in Svalbard” and already has a Svalbad foothold with its research facilities in Ny-Ålesund.
“Reality is not, as (one expert puts it), that Norwegian authorities will “end up in a serious confrontation with Russian and Chinese interests” if they prevent coal operations in Hiorthhavn,” Amundsen wrote. “This is because coal operations will not be taken up in the old mining town in Hiorthhamn, neither by Chinese, Russians nor Norwegians. For the simple reason that the coal era in Svalbard is singing its very last verse.”