Svalbard plot: gov’t hopes to buy soon

Norwegian minister of trade and industry Monica Mæland, who today started her first visit to Svalbard, told Svalbardposten she hopes her government will soon be able to purchase Austre Adventfjord, a privately owned 200 km2 plot put on sale a few months ago. The owners, the Horn family, are involved in a dispute with Store Norske, Norway’s state-owned coal miner on Svalbard, and say they only decided to look for a private buyer when negotiations with the government failed. The possibility of that chunk of Svalbard ending up in foreign hands (citizens of all Svalbard treaty signatories can own property on the islands) has unnerved some in Norway and might motivate part of the government’s interest in buying it themselves.

One Svalbard treaty signatory is China, and at a point Norwegian broadcaster NRK aired an interview with Chinese real-estate tycoon Huang Nubo about his interest in purchasing Austre Adventfjord. After the Horns categorically rejected having had any contact with Huang, the interview was referred to a misunderstanding NRK blames on Huang.

More on Austre Adventfjord here.

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more on Svalbard plot up for sale

VG has just published an interview with Henning Horn, who owns (together with two siblings) Austre Adventfjord, a 200 km2 plot near Longyearbyen, Svalbard, and has recently announced he’ll try to sell it, possibly to a foreign entity, after failing to reach a deal with the Norwegian government. Mr Horn dismisses fears of political tensions if part of Svalbard is sold to foreigners. “Norway should be more humble towards the Svalbard treaty,” he says, quoting the forty-nation agreement that gives all signatories equal rights to engage in economic activities on the islands. “Norway’s position isn’t higher than that of the other signatory states. There’s no reason for Norway to own 99 percent of the archipelago.” The idea that Svalbard is “primarily Norwegian” is a “misconception” that could lead to a loss of credibility and possibly a renegotiation of the treaty.

Regardless of who ends up owning the land, Horn plans to develop coal mining there, together with his partners, among them Bjørn Fjukstad, an engineer formerly with coal miner Store Norske and once chairman of the Longyearbyen community council. There’s a lot of coal there, they claim. The 20m tonne figure quoted recently refers only to the reserves in Operafjellet. The whole plot might contain up to 170 million tonnes, and they envisage an operation with 85 employees and a wharf within the property.

Coal mining in Svalbard has long been more a matter of asserting a presence in the region than of profitability, for Norway as well as for Russia, the only other state with an economic activity on the islands. Norwegian state-owned coal miner Store Norske reported losses of $65m in 2012 and $13m last year. Almost all coal from Svalbard is exported to Europe (mainly Germany), while Norway, which produces no coal on the mainland, imports it from other sources, as shipments from Svalbard aren’t available year-round. While coal mining there makes relatively little economic sense, many in Norway (including some who otherwise oppose coal mining as damaging to the environment) advocate for its continuation based on “sovereignty” and “national security” grounds.

The Russians stay there for arguably similar reasons. Arktikugol, the company that exploits the Russian coal mines in Svalbard, is the only remaining state-owned coal miner in Russia, and in 2012 had losses of half a million dollars. Their coal is not particularly needed in Russia and is sold to Western Europe instead. Despite a history of accidents and tense relations with the Norwegian authorities, Arktikugol’s activities are planned to continue, and to be expanded into developing tourism (something they have attempted, unsuccessfully, in the past) with trips possibly departing from Murmansk.

In the meantime, speculation that someone from China might be interested in buying Austre Adventfjord continues, as reports and opinions about the potential sale bounce back and forth between Norwegian, Hong Kong (now also in the Wen Wei Po), Icelandic and other media sources. So far, the closest to a display of ‘interest’ from Chinese state sources has been a news item on the website of the Chinese trade representation in Norway, as I noticed a couple of days ago.