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Tourism almost as important as coal for Russians

Coffee and pastries are served in the hotel restaurant after the tour in Pyramiden. FOTO: Eirik Palm

Tourism almost as important as coal for Russians

Trust Arktikugol hopes tourism will provide more income than coal by 2018.

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22.11.2015 kl 11:20

A tour group moves down the concrete pavement from the cultural center in Pyramiden. To the left is the building with the old swimming pool and along the way in what might be called the center in the abandoned Russian settlement stands the world's northernmost Lenin statue. The grass in the square, according to the guide, is grown in soil from Ukraine. Along the way he makes short stops and tells the entourage stories about healthcare, the KGB, families and coal mining in the settlement that was once a showcase for the Soviet Union in the High Arctic.

Like coal mining

Tourism is now becoming the main source of income for Trust Artikugol, according to Alexander P. Veselov, director of the state-owned coal company, at the Russian website arctic.ru.

"Our goal is that we will earn more from tourism than from coal mining in 2018," he said, according to the website.

Trust Artikugol received a license as a Russian tourism operator in January, and is now concentrating on taking tourists to Barentsburg and Pyramiden. In Longyearbyen, the trust opened a hostel for the travelers. The purpose is using it to organize guests, as well as having an accommodation for snowmobile tourists heading between Barentsburg and Pyramiden.

In the future, revenues are expected to rise steadily. Veselov said the goal is Trust Artikugol will earn 22.7 million kroner in 2018 through tourism.

That is, according to the Russian Director, more than the state-owned coal company anticipated.

"By 2018, we expect 180 million rubles, which is equal to the revenue we have from coal mining today," Veselov said.

By comparison, revenues last year were less than five million, and in 2015 it is estimated that these revenues will rise to between seven and eight million.

Se bildet større

Revenues from tourism are expected to increase over the next few years from NKR 4,9 millions in 2014 to 22,7 millions in 2018. FOTO: Svalbardposten, grafikk

The pitch

Veselov told Svalbardposten in January tourism will be important for Barentsburg, but that it would take many years before tourism became the main source of income. Now he is more definitive.

Trust Artikugol has worked extensively on the refurbishment of Barentsburg, which has received a facelift. In addition to more beds for tourists and visitors, the mall, souvenir shop, museum and walks down the mine are part of the overhaul.

Referring to the mine tours, Veselov said he wanted tourists to be able to go into the mine with a monorail. That requires both security and heating, and Veselov said at the time Trust Artikugol would likely get started on the project between 2015 and 2017.

In the interview in Svalbardposten at the end of last year, Veselov said he hoped tourism would be be the main source of income for Barentsburg.

"I only hope it can be that, but not in the near future," he said at the time.
Trust Artikugol's prognosis now has changed drastically, suggesting it will happen within in three years.

More coal?

Next year Trust Artikugol willl celebrate its 85-year anniversary. Annual production is about 120,000 tons of coal and, in recent years, the company has focused more on activities such as research and tourism.

Meanwhile, Veselov said they are counting on buttoning down coal production. Current production in Barentsburg is too small to operate at a profit, making Trust Artikugol dependent on subsidies from Russia. The subsidies have, however, been cut by 40 percent since 2009, according to the Veselov.

"Coal reserves in the Barentsburg mine is limited to 120,000 tons," Veslov said. "This is too little, but we cannot increase production here before there is a decision to build a new coal mine."

An estimate from the state company and the Russian Ministry of Energy suggests the annual production must be 350,000 tons to break even.


Translated by Mark Sabbatini

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