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Miners tired of government's inaction

It's been nearly three months since the board of Store Norske asked the Government for help. Union steward Arild Olsen is tired of waiting for an answer. FOTO: Eirik Palm

Miners tired of government's inaction

Suggests the government is spreading insecurity throughout the community by hesitating to provide answers about the company's request for emergency loans.

"I'm beginning to get annoyed at how long things are taking," said Arlid Olsen. "From my standpoint, it should be quite unnecessary to spend so long on a – for me – seemingly simple question."

'An unacceptable iron grip'

Svalbardposten confirmed before Easter there would not be an answer about the company's request until after the holiday. Shortly after, the company received the same notification. When the company first made its request it was expected, or at least hoped, the application would reach Parliament before the holiday.

It has been clear since last fall the coal company is experiencing a serious financial struggle and in November the news came that approximately 100 of the existing 340 positions were being eliminated. On Jan. 16 of this year, then-Chairwoman Annette Malm Justad submitted an inquiry to the Ministry of Trade, Industry and Fisheries regarding an emergency loan of 400 million kroner to continue coal mining operations and another 50 million to restructure the nearly 100-year-old coal company. Industry Minister Monica Mæland, a Conservative Party member, promised the proposal would receive through consideration, but three months later patient is beginning to run out among the mining company's employees.

"I simply think the government is keeping employees and residents of Longyearbyen in an unacceptable iron grip," Olsen said. "Strictly speaking we ought to be concentrating about things other than speculating if we will be granted the loans in the application. For every day that passes, the employees are increasingly anxious about whether the government will support coal mining."

Fearing more cutbacks
March 31 was the last day of the three-month long notice period for many of the employees. Some departed at the beginning and throughout the spring more have disappeared. Store Norske has bought time through negotiations with creditors and subcontractors, and therefore has funds to continue operations until June, but coal prices are low and the company is running a minimal operation.

The most recent layoffs and the company's restructuring plan is based on a coal price of 75 dollars per ton, but the price below Easter was well below 60 dollars. Coal prices on the world market remain uncertain and Wenche Ravlo, who recently became Store Norske's new administrative director, is suggesting more layoffs may be needed to cope with the challenge presented by low prices.

Olsen said the employees have contributed greatly to keeping costs down and noted they have also shown great adaptability. This is the second major round of layoffs at coal company at a little over two years. Uncertainty, he said, is leading to fears the company is at risk of losing more beyond those who have already departed or are leaving now.

At the same time, he said he believes there will be a solution.

"But there should be a clarification quickly," Olsen said. "Now we must concentrate on what we will actually be doing."

'A conclusion relatively soon'
Trond Viken, chief spokesman for the ministry, said there are no new considerations in the matter and work is proceeding.

"The ministry is still working on considering the request from the board and it would be wrong to go into the individual elements of the assessments that are now done," he wrote in an e-mail. "We are aiming to come to a conclusion relatively soon – as the situation dictates."

"To the extent that the matter involves grants from the state to Store Norske Kulkompani AS, the case must be submitted to Parliament," he noted.

Viken emphasized the government assumes Store Norske has an important role, both for the maintenance and further development of the local community, and therefore remains in line with the Norwegian objectives regarding Svalbard policy.

Minister of Justice Anders Anundsen, whose department has oversight authority of Svalbard, announced earlier this year a new white paper is being drafted defining policy objectives in the archipelago. The announcement by the Progress Party member was made after Store Norske's board of directors made its request for loans. The Norwegian government owns 99 percent of Store Norske and the company is therefore dependent on support from the owner to proceed with other restructuring measures such as bank refinancing.

Translated by Mark Sabbatini

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