The reduced operation comes as a result of low coal prices on the world market.
The company states that everything indicates that coal prices will remain at a low level in the future, and that it leads to substantial losses.
Monday’s decision is not sufficient to ensure Major Norwegian, and further measures are being considered, the company writes in a press release Monday night.
The company has 340 employees in mining operations in Svalbard.
250 can move from Svalbard
– This is a sad day for the Svalbard community. It is dramatic with such large cuts in business to Store Norwegian. And it’s especially bad that many are now going to lose his job just before Christmas, says local chairman Christin Kristoffersen (Ap).
According to local chairman, up against 250 of total 2200 inhabitants in Longyearbyen be affected by redundancies, about using a normal factor of 2.5 to bring family members of those who lose their jobs.
– 30 percent of those who work in the mines also have children in kindergarten or school, and the cuts are going to give repercussions for a variety of businesses here, says Kristoffersen.
Reduces the two mines
It will initially be implemented reduced operation in Svea Nord and Lunckefjell six mil south of Longyearbyen.
Currently, it will be held normal operations in Mine 7 just outside Longyearbyen, but Chairman Annette Malm Justad told Aftenposten that one can not rule out cutbacks also there.
– We deeply regret that we must terminate employees, but it is necessary to reduce operations and cut costs if the company is to survive. The alternative is controlled liquidation now. It is also important to be aware that the crisis in the Great Norwegian is not over with, she says.
Big gap profitability
When the new Lunckefjell mine opened in February, as first Svalbard mine for 14 years, was the potential for profitable operation for a coal price of around $ 130 per tonne.
– Now the price dropped to 73-74 dollars per ton, and against all predictions, the price not increased during the autumn, but rather stagnated like the price of other commodities such as iron ore and oil, says Malm Justad.
– Is this the beginning of the end of coal mining on Svalbard?
– I have no ambitions to liquidate coal mining, but it is necessary to find a profitable operation. There may be new measures on top of the downsizing that has now been adopted, and we are also going to have to put in place new funding to improve the company’s liquidity, she said.
Need new loans
Malm Justad reports that Major Norwegian need increased borrowing to get through the crisis.
Major Norwegian was established in 1916 and operates three coal mines in Svalbard Svea Nord and Lunckefjell seks mil south of Longyearbyen, and Mine 7 Adventdalen right outside Longyearbyen.
Travel and research new pillars
According to local chairman Christin Kristoffersen has Svalbard community for a long time worked to build up strong complements to mining.
– The tourism industry has got a lot of good, and has become a year-round offerings with new visitors. Besides research activities a strong contributor to new activity, said she.
Got 200 million. New Port
Last year Svalbard also set up in the National Transport with a grant of 200 million million to construct new port in Longyearbyen.
The entire project is estimated to cost 400 million.
– Much of the development potential we see require an industrial engine, and Major Norwegian is an important player for port development, says Kristoffersen.
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