The mining company Store Norske is considering to re-open mining on Svalbard after coal prices have increased significantly.
A year ago, the mining operations in Svalbard were stopped when the price of coal had remained low for several years.
The main mining company Store Norske has been relying on government support to sustain production. However, they may now start-up operations again, writes newspaper Klassekampen.
– We aim to re-open the operation, if coal prices and other factors make it possible.
There has been a tremendous rise in coal prices, and we have started an assessment of whether we can start-up again, but we need to see a stability in prices, says CEO Wenche Ravlo in Store Norske Spitsbergen Kulkompani.
Ravlo say they rely on a long-term price of approximately 65-70 dollars per ton.
– Coal prices have almost doubled from 45 dollars per ton in April to 85 dollars today and the long-term prices are now at 70 dollars, says chief analyst Bjarne Schieldrop of SEB. The price increase is due to production cuts in Australia and increased imports in China.
– A startup will have enormous significance for Longyearbyen, says local chairman Arild Olsen.
In addition to stable prices, the mining company also depends on working capital, since it will take time from start-up of production until the coal is purchased.
Source: NTB scanpix / Norway Today