Funding for Store Norske on Svalbard

The Norwegian Government contributes with funding for Store Norske’s mining company. The funds will be provided by the state purchasing properties from the company and potentially through a loan.

“I’m satisfied that the Norwegian Government contributes to a solution for the company, which is in a difficult situation. This is the right solution for Norway, the Svalbard community and the company. The mining company contributes to a vital community in Longyearbyen”, says Minister of Trade and Industry Monica Mæland.

The mining company of the Store Norske group, Store Norske Spitsbergen Grubekompani (SNSG), is in a challenging financial situation. In order to enable continued mining operations, the government has decided to contribute funds for the Store Norske Group, which are to be transferred to the mining company. The decision is subject to approval from parliament, The Storting.

The state will provide funds by buying properties and potentially providing a loan. A total of  500 million kroner will be provided for SNSG.

The objective of the state’s ownership of the Store Norske Group (Store Norske Spitsbergen Kulkompani AS) is to help maintain and develop the Longyearbyen community in a way that underpins the general objectives of Norway’s Svalbard policy.

“It’s important to maintain both economic activity and settlement on Svalbard. The mining operation by Store Norske is a contributing factor. Mining is nevertheless characterized by market risk. While this agreement means that mining operation can continue for now, there are no guarantees that future market conditions will be supportive of continued coal mining in the long term”, says Mæland.

The Ministry of Trade, Industry and Fisheries have entered into an agreement with the company and its bank, and appreciate the fact that all parties have been constructive. The Store Norske Group will have the opportunity to manage properties and assets purchased by the state on the state’s behalf.

The Government will shortly submit a bill to the Storting.

“The Government will follow up on the business strategy for Svalbard, and I plan to visit Longyearbyen now before summer. We will also get back to measures for the shift to a new economy in the up-coming white paper on Svalbard”, says Mæland.

The group’s mining operation on Svalbard is run by the Store Norske Spitsbergen Grubekompani AS (SNSG), which is a wholly owned subsidiary of Store Norske Spitsbergen Kulkompani AS (SNSK). Mining operations take place in Svea Nord, Lunckefjell and Gruve 7 near Longyearbyen.