Norwegian State Budget: Liquidates on Svalbard

The Norwegian government proposes liquidating coalmining operations in Svea and Lunckefjell mines on Svalbard and wants to clean up the mines in 2018.

- Following an overall consideration, the government has decided that the right solution now is liquidating coalmining operations in Svea and Lunckefjell and cleaning up after it, says Norwegian Minister of Trade and Industry Monica Mæland (Conservatives).

Coalmining operations in Svea and Lunckefjell mines were halted, or frozen, in 2016. The operational freeze was set to last up to three years, based on there no longer being any economic reasons for continuing operations. About 45 people were employed in Svea and Lunckefjell in 2016.

- The market outlook for coal is still demanding. We cannot resume operations without supplying substantial funds from the state, with a huge risk of loss. We have also emphasized that continued freeze of operations is not viable any longer. The company is also clear about that, Minister Mæland says.

In the state budget proposal for 2018 the government suggests allocating NOK 141 million to start cleaning up Svea and Lunckefjell. The total cost for a cleanup will depend among other on what requirements the environmental authorities will present.

The government will not facilitate other activities in Svea once the cleanup is done. This, however, does not exclude the opportunity for some of the remaining so-called “cold” buildings may be available for disposal for tourism or research, just like abandoned buildings elsewhere on Svalbard currently are.

- There will be a high level of activity in Svea and Lunckefjell during the cleanup period, which will provide the Longyearbyen community with further time for transition, Mæland says.

The government also suggests allocating a further NOK 43 million in 2018 to cover the retirement cost obligations for the Store Norske coalmining company.

- Store Norske will continue to play a key role, in particular through operations in Mine 7 and through the cleanup in Svea and Lunckefjell, Minister Mæland says.