ARCTIC

Days after approving massive coal divestment, Norway votes to fund mining company

Members of Norway's parliament voted unanimously during the first week of June to drop the biggest coal investments from its sovereign wealth fund.

A week later, on June 11, the parliament approved a new budget item: 500 million kroner (about $65 million) to subsidize a state-owned coal mining company in Svalbard, Norway's archipelago territory about 450 miles north of the mainland.

The government will provide Store Norske Spitsbergen Grubekompani (SNSG) with 205 million kroner ($27 million) in loans and 295 million kroner ($38.5 million) to purchase new property. Ninety-six of the parliament's 169 members voted for the measure, and three voted against it.

"The mining company contributes to a vital community in Longyearbyen," said Monica Mæland, the trade and industry minister, in a statement outlining the proposal in April.

"It is important to maintain both economic activity and settlement on Svalbard," Mæland said. "The mining operation by Store Norske is a contributing factor. Mining is nevertheless characterized by market risk."

Advertisement

The government has warned that SNSG's coal-mining operations, which export about 95 percent of the company's production, could be shut down before 2017 if demand and global coal prices don't pick up.

SNSG employs about 270 people and operates three mines, including one in Longyearbyen, where the mayor lobbied hard for funding from Oslo.

Last Thursday in Oslo, on the floor of the Stortinget, the Parliament chamber, representatives overwhelmingly backed the measure.

Else-May Botten, a labor party member, told her colleagues that Svalbard gives Norway a "strategic advantage in the Arctic" in geopolitical issues. Research jobs and tourism are major sources of employment in Svalbard, but mining "still has great significance" for the community, she said.

Even the Green Party supported the measure, though its party leader, Rasmus Hansson, framed the bailout as a way for the company to transition out of coal extraction.

"We have long and clearly argued that Norwegian coal production on Svalbard should be dismantled," Hansson said on the parliament floor, according to a translated transcript. Allowing SNSG to go bankrupt would be reckless, but Svalbard coal doesn't make sense financially or environmentally, he said.

"To simply continue as if nothing has happened, until the bankruptcy is on our doorstep, has been ... inconsistent climate policy and bad policy for Svalbard," he said.

Oil investments dwarf coal

Pål Farstad, of the Liberal Party, also underscored the apparent contradiction of financing fossil fuel operations at home while purging financial holdings of coal companies abroad.

"It is precisely lower coal prices internationally which now give us a very special challenge on Svalbard," he said. "Norway's policy in the Arctic is based on sustainability and low voltage."

Oil and gas businesses, the primary foundation underpinning the $900 billion national investment fund, loom significantly bigger in the Norwegian economy than coal.

In 2013, Norway was the third-largest natural gas exporter and the 12th-largest net oil exporter, according to U.S. Energy Information Administration (EIA) data. The year before, Norway was the 23rd-biggest coal exporter, between Japan and the United Kingdom, shipping just 1.4 million short tons.

Managers of the national wealth fund have said the new coal divestment policy, which excludes mining and power companies that base 30 percent or more of their income on coal, will implement the screen in 2016 (ClimateWire, June 8).

Scientists are acutely concerned about black carbon, the byproduct of partially burned fossil fuels, in the Arctic. Dark particulate matter, the manifestation of black carbon, darkens the Arctic's bright landscape, triggering more heat absorption in the sensitive region.

The Arctic Council of the world's eight Arctic nations, including Norway, agreed to track and report on black carbon and methane emissions at its April meeting in Canada (ClimateWire, April 27).

Twitter: @benhulac | Email: bhulac@eenews.net

Like what you see?

We thought you might.

Start a free trial now.

Get access to our comprehensive, daily coverage of energy and environmental politics and policy.

Advertisement

Advertisement

Latest Selected Headlines

More headlinesMore headlines

More headlinesMore headlines

More headlinesMore headlines

More headlinesMore headlines