The board of Store Norske has decided to postpone the closure of Gruve 7 (Mine 7), which is Norway’s last coal mine on Svalbard. Originally, the mine was to close when the coal-fired power plant in Longyearbyen closes in autumn 2023. The reason was that the purpose of the operation is to supply coal to the energy plant, and that the market was previously such that there was no potential for profitable operation.
However, the situation is different now, says Anette Malm Justad, Chairman of Store Norske. Store Norske has reached an agreement with the German company Clariant to continue supplying coal for industrial production until the summer of 2025. The company has been buying coal from Gruve 7 for 40 years. Based on the current market situation for coal, they want to secure access to coal in the quality they need for their purposes.
Store Norske says this is a good solution for all parties. “We can extract the available coal reserves in Gruve 7 and are assured of good profitability with low market risk through this agreement with a customer with whom we have had a long-term professional collaboration. For our part, it gives us somewhat longer time for a demanding and necessary restructuring of the company. Not least, it is gratifying for our employees in Gruve 7 who get more predictability and can stay at work longer,” says Jan Morten Ertsaas, CEO of Store Norske.
In addition to mining, Store Norske has significant activity in real estate, logistics and energy. In 2021, Store Norske bought both hotels and an property portfolio from Hurtigruten Svalbard. Store Norske now owns around 40% of the homes in Longyearbyen in addition to a significant commercial property portfolio. In the next few years, many industrial workplaces on Svalbard will disappear, so there is an urgent need for restructuring and development of business life in Longyearbyen.
“We are contributing through increased investment in logistics, renewable energy and adaptation of the building stock to the green shift that is coming. We have been an Arctic energy company for over 1oo years, and our ambition is to continue this role by actively contributing to the transformation of today’s fossil energy systems in Svalbard and the Arctic,” says Ertsaas.