Svalbard Expert: - Weakens Norway’s Position

- A somewhat incomprehensible decision that will weaken Norway’s position in Svalbard. Those are the words of Svalbard analyst Per Arne Totland following the Norwegian government’s decision to halt coalmining operations in Svea and Lunckefjell.

- The government has obviously emphasized economic arguments more than anything when it suggests closing down coalmining operations in Svea and Lunckefjell. That raises fundamental questions about Norwegian presence and position on the islands, writer and Svalbard analyst Per Arne Totland says to High North News.

Monica Mæland, Norwegian Minister of Trade and Industry, in this week’s state budget proposal placed particular emphasis on economic insecurity and high potential for loss for the state when arguing why the government has suggested liquidating production in Svea and Lunckefjell. 

Strange timing

Totland questions the government’s calculations and also its timing for such a decision.

- The government has obviously placed most emphasis on economy and on the political incorrectness of all coalmining. However, it is worth noting that this happens in a time when the international pressure against Norwegian Svalbard policy appears to increase. It is, for instance, just one week ago since the Russian Ministry of Defense pointed to Svalbard as a potential arena for conflict, Per Arne Totland points out.

Replaced sledgehammer with nippers

- Store Norske, the Svalbard coalmining company, has been one of the most important tools in Norway’s toolbox for Svalbard. In practice, the government has now put this tool aside, or perhaps just replaced it the huge sledgehammer with a small nipper.

One could argue that Store Norske’s importance for Svalbard has decreased over time, and that Svalbard has managed well through the crisis in the company. However, that is only partially correct seen from a Norwegian point of view. Employment is decreasing and the share of Norwegian’s in the Svalbard population has decreased substantially – from 68 percent five years ago to only 57 percent today.

This also has to do with claiming sovereignty, Per Arne Totland argues.

- Restarting coalmining would have provided more than 200 jobs over the next 12 years, mainly Norwegians, which is quite substantial in a small economy like that of Svalbard.

Ambiguous economic image

The economic image is ambiguous. Whether choosing liquidation and cleanup or rather resuming operations in the two mines, each alternative will lead to costs – and a certain risk, too.

Totland presents the dilemma:

Liquidation costs of NOK 500-1,000 million and 40 jobs in Svea during a three-to-four years’ period OR 12 years of operations which, according to what I understand, would require a direct state contribution of some NOK 500-700 million, in additional to loans on the market.

The risk involved with coalmining suggests that these means could be lost, however, it is also likely that Lunckefjell would operate modestly well and that the costs of a cleanup could be distributed across more years. This alternative would have provided 200 jobs over 12 years on Svalbard – as well as transition time.

Expensive anyway

- However one chooses to solve the coalmining questions, it will cost. Store Norske argues that resuming operations could provide a genuine surplus during the 12 years there may still be coal to exploit.

However, another and perhaps at least as interesting question is what will happen to the exploration licences for coal that are currently in the possession of Store Norske. This may be a source of conflict for those who so desire.

Totland points out that the licences are linked with a duty of activity for each license, and that they will be made available for the market if Store Norske does not uphold its activities.

Can deny operations for others

- This means that mining companies from other countries that have signed the Svalbard Treaty can claim these licenses and prepare mining operations on the old licenses of Store Norske. This could be mining companies subsidized by their home state and who are not dependent on profitability.

- But the Norwegian state can refuse that based on the Svalbard Treaty?

- Yes, Norwegian authorities can of course deny such actors the right to start up new mine, however, such a denial must be reasonably argued.

One opportunity lies in using the Svalbard Environment Act, an act against which Russia has previously launched heavy protests against. Or, Norwegian authorities can adopt laws that in general bans all new coalmining on Svalbard.

Several potentials for conflict

The problem with both these alternatives is that they carry the potential to cause conflict with other states that hold an interest in Svalbard. There may be states that are looking for opportunities for conflict at Svalbard in order to put pressure on Norway, Per Arne Totland emphasizes.

He argues that the conclusion is, nevertheless, that the government’s decision opens up for a whole new set of challenges:

- It is possible that Svalbard through the liquidation of coalmining operations is laid more bare – and Norway’s position is weakened.

The government has not yet managed to come up with alternative business drivers of any significance to secure a robust and stable Norwegian presence on Svalbard, and it is imaginable that other states’ coalmining actors may try to fill the empty space left void following Store Norske’s coalmining operations.

Norwegian authorities will try to prevent this, and new international conflicts over Svalbard may arise, in addition to those that already exist, says Svalbard expert Per Arne Totland.