Norway to shut its last Arctic coal mine in 2023

Norway will in 2023 shut its last coal mine in Svalbard, its operator said Thursday, drawing to a close more than a century of prospecting by Oslo in this Arctic archipelago.

An old dilapidated factory in Svalbard, where Norway will end coal mining operations in 2023.
An old dilapidated factory in Svalbard, where Norway will end coal mining operations in 2023. Photo by Vince Gx on Unsplash

Mine 7 will close in September 2023 after authorities in Longyearbyen, the archipelago’s capital, terminated a contract to supply the local power plant, the Store Norske mining company announced.

The closure won’t spell the end of all mining in this snow-drenched place north of the Arctic Circle, as a Russian company continues to extract coal there, keeping a strategic presence in the Arctic.

“The purpose of Mine 7 is to supply coal to the power plant in Longyearbyen. Now that the coal supply agreement has been terminated, there is no longer any reason to operate the mine,” Store Norske’s director Jan Morten Ertsaas said in a statement.

“We have been producing coal in Svalbard for more than 100 years, so it is kind of special to bring the coal era to a close today,” he added.

Longyearbyen was founded in 1906 by John Munroe Longyear, an American businessman, to mine coal.

In 1920, Norway’s sovereignty over the archipelago was recognised in a treaty that gave other signatory states, including the Soviet Union at the time, permission to engage in economic activities there as well, on an equal footing.

Longyearbyen’s power plant will be fuelled by diesel after the end of coalsupply, until a solution involving renewable energy is set up.

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Could the Norwegian government introduce a cap on energy prices? 

Due to soaring prices, the Norwegian government is mulling over several solutions, including a potential price cap for electricity and limiting energy exports abroad. 

Could the Norwegian government introduce a cap on energy prices? 

High energy exports in the last 12 months, low filling levels in Norwegian reservoirs and an uncertain energy situation around Europe have led to soaring electricity prices in southern Norway. 

Last year the government introduced a scheme whereby it covers 80 percent of consumers’ energy bills where the price rose above 70 øre/kWh. The portion of the bill under 70 øre is paid in full by households. The portion the government covers will increase to 90 percent in October. 

Critics have argued that the current scheme still leaves households struggling with their bills. As a result, Norway’s government has said it is mulling its options to curb energy bills.

Norway primarily depends on hydroelectric dams to help it meet its energy needs. Still, reservoirs in southern Norway have been at the lowest level for ten years, public broadcaster NRK reports. 

Low reservoir filling over the past year has conceded with record exports with higher prices on the continent, making sending power abroad an enticing proposition.

Recently, exports have fallen significantly, and the government is considering introducing a limit to reduce the possibility of energy rationing being introduced this winter. 

“Restrictions on the export of electricity to Europe may be one of the measures that is needed,” Elisabeth Sæther, state secretary at the Ministry of Oil and Energy, told NRK. 

Earlier this week, Prime Minister Jonas Gahr Støre ruled out completely shutting off exports to the continent. 

“It is a dangerous thought and will not serve us well. It could give us more expensive power and lack of power in given situations. We will hardly be able to import power when we need it without contributing to other countries when they need it. There is a reciprocity in this,” he told the newspaper Aftenposten earlier in the week. 

Sæther also told NRK that the government was weighing up putting a maximum price on energy but warned that it could have unforeseen consequences. 

“We are afraid that a maximum price means that more water is drawn into the reservoirs, which we need for the winter. It is a serious situation. We must prevent ourselves from getting into a situation where we lack enough power this winter,” she told the broadcaster. 

At the end of May, the state-owned Statnett announced that the supply situation in Norway might be under strain – in some scenarios – all the way up to and through the winter, especially if Southern Norway experiences drier than usual weather in the second part of the year.