Svalbard: Prolongs Life of Mine 7 With Two Years - But Then It Is All Over
Norway's last coal mine receives two bonus years as a result of high coal prices.
The changed world situation has led to an increase in demand and higher prices for coal. Store Norske is therefore prolonging the operation of Mine 7 until the summer of 2025. Until then, they will be exporting coal for industrial production in Germany.
When High North News talks to Jan Morten Ertsaas, CEO of Store Norske, he has just visited the employees in Mine 7 with cake. They have been aware of the plans the management has been working on, but it was only on Thursday evening that the final part of the deal with the German company Clariant was sealed.
Clariant has bought coal from Store Norske for 40 years for use in industry. Now they are buying the rest of Store Norske's industrial coal for production.
"They are buying what we have arranged for with infrastructure to take out. We have no plans of and will not work towards operation in other areas after the summer of 2025, says Ertsaas.
He is glad that Store Norske will now have more time for what he refers to as a demanding and necessary restructuring of the company.
We need answers from Longyearbyen Local Council by the end of November.
"Not least, it is positive for our employees in Mine 7 who will have more predictability and can work longer," says Ertsaas.
Awaits the energy plant in Longyearbyen
Originally, Mine 7 was to be closed in the fall of 2023. When it was decided that the coal-fired power plant in Longyearbyen would be phased out, the purpose of operating the mine disappeared. Nor would it be possible to operate the mine profitably at the time of the decision. Now, coal prices have risen as a result of the war in Ukraine.
So have diesel prices, and Longyearbyen Local Council is reconsidering the transition to a new diesel-powered energy plant. The decision is set to be made in November, writes Svalbardposten.
Today, Store Norske delivers coal of two qualities. One is industrial coal with low stone and ash content, and it is this high-grade coal that Clariant has agreed to buy.
In addition, Mine 7 has coal with higher stone and ash content, which they have sold to the energy plant in Longyearbyen. This amounts to approximately 30 percent. Before long, Store Norske again needs answers on whether Longyearbyen will be powered by coal after 2023.
"We need answers from Longyearbyen Local Council by the end of November. Clariant can also buy this coal, and we know what they are willing to pay for it. We can sell it to them or on the market," says Ertraas.
"Restructuring is of urgency"
In addition to mining, Store Norske has significant activity in real estate, logistics, and energy. In 2021, Store Norske bought both the hotels and the rest of Hurtigruten Svalbard's properties. Store Norske now owns approximately 40 percent of the homes in Longyearbyen, as well as a significant portfolio of business properties.
"Many industrial workplaces will disappear during the next few years, which is why restructuring and development of industries in Longyearbyen is of urgency. We contribute through increased investment in logistics, renewable energy, and adaptation of the building stock to the green shift which is coming. We have been an Arctic energy company for over a hundred years, and our ambition is now to continue this role by actively contributing to the restructuring of today's fossil energy systems on Svalbard and in the Arctic," says Ertsaas.