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'Be proud'

Despite low coal prices and huge losses, Arild Olsen believes it is possible to achieve profitability in the coal company. FOTO: Eirik Palm

Union leader's message to employees:

'Be proud'

The question of a state guarantee to Store Norske will in all likelihood end up in Parliament.

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21.11.2014 kl 19:07

"People are taking it calmly and realizing the gravity," said Arild Olsen, the union steward for Store Norske.

When the proposed job cuts were revealed Tuesday, he was at Svea to talk with employees.

"My job is to protect our members and to ensure that as many people as possible have a job for as long as possible, protect those who are affected and ensure job security for those who are left," he said.

Nearing a shutdown

A plan to ensure profitability, or at least the ability to break even, is expected to be presented by Store Norske's board of directors when it meets with Norway's Ministry of Trade, Industry and Fisheries in January. Store Norske suffered a loss of 225 million kroner during the first nine months of 2014 and the deficit is growing daily. In addition, the reduction of assets means the company will face serious financial problems early next year that will require a guarantee of backing from the government. That is where Parliament will come into play.

But the work is already hectic this week for those working to influence those who will be involved in determining the coal company's future. Olsen and Longyearbyen Mayor Christin Kristoffersen will travel down to Oslo for a week to attend meetings of Parliament as the pair gets an early start on lobbying Thursday.

"I know the business from the inside, and know that there is potential and opportunities to bring down costs. My ambition is to make coal mining profitable in the future," the union leader said, adding there will be an emphasis on the urgency of the situation.

"The clear message will be that if we will not have established financing during the first quarter, then it stops," he said.

25 percent
Working hard beside Store Norke is the Longyearbyen Community Council. On Tuesday, the politicians approved sending Kristoffersen as the council's leader to Parliament for talks with policymakers and advisors.

"This is not a community with a broken back," said Kristoffersen, who has a full meeting schedule. "We have very good and solid arguments on this issue."

In addition to the company's expertise and strategic role, she will explain the consequences of a shutdown of the coal company. For example, 25 percent of the children in Longyearbyen's school and kindergartens belong to parents who work at Store Norske.

Kristoffersen said she believes consideration by Parliament will come quickly after the company's board has presented a plan the government, which owns 99.9 percent of Store Norske, can accept. She said she is also afraid the situation will trigger a depression.
"Job number one is caring for the residents and I feel like I have a train in the back running through the local community," she said.

The Svalbard Chamber of Commerce is among those at the forefront of lobbying Parliament. Director Terje Aunevik said he fears it will boil down to a debate about saying yes or no to coal.

"There must not form an impression that we will go in and subsidize a past, but that we should invest in a future," said Aunevik, adding he believes there is a window of time ahead to be bold and create a zero-emissions society based on coal.

Seeking a leader

This is the second round of layoffs during the past 18 months. Last year, when 80 positions were eliminated, there was also approval of an operational plan based on an average coal price of 83 dollars a ton. Olsen said the operational goals were met and are being achieved today. Therefore, he said he has a firm belief it is possible to rig an operation at a rate of 70 dollars per ton.

How does he feel about the crisis occurring in the middle of the company's search for new management?

"It would be a huge advantage to have that in place now," he said. "The new manager is going to be getting a challenging job."

Olsen also points out the workers – despite high stone content in coal, malfunctions with new equipment, difficulty with the concentrating plant and falling coal prices – managed to open a new coal mine. To the employees, he has one message:

"Be proud," he said. "We have delivered and no one should be ashamed of this effort."

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