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Arktikugol (russian: Арктикуголь, lit=Arctic Coal) is a Russian
coal mining Coal mining is the process of extracting coal from the ground. Coal is valued for its energy content and since the 1880s has been widely used to generate electricity. Steel and cement industries use coal as a fuel for extraction of iron from ...
unitary enterprise A unitary enterprise (russian: унитарное предприятие) is a government-owned corporation in Russia and some other post-Soviet states. Unitary enterprises are business entities that have no ownership rights to the assets that th ...
which operates on the island of
Spitsbergen Spitsbergen (; formerly known as West Spitsbergen; Norwegian: ''Vest Spitsbergen'' or ''Vestspitsbergen'' , also sometimes spelled Spitzbergen) is the largest and the only permanently populated island of the Svalbard archipelago in northern Nor ...
in
Svalbard Svalbard ( , ), also known as Spitsbergen, or Spitzbergen, is a Norwegian archipelago in the Arctic Ocean. North of mainland Europe, it is about midway between the northern coast of Norway and the North Pole. The islands of the group rang ...
,
Norway Norway, officially the Kingdom of Norway, is a Nordic countries, Nordic country in Northern Europe, the mainland territory of which comprises the western and northernmost portion of the Scandinavian Peninsula. The remote Arctic island of ...
. Owned by the
government of Russia The Government of Russia exercises executive power in the Russian Federation. The members of the government are the prime minister, the deputy prime ministers, and the federal ministers. It has its legal basis in the Constitution of the Russ ...
, Arktikugol currently performs limited mining in
Barentsburg Barentsburg (russian: Баренцбург) is the second-largest settlement in Svalbard, Norway, with about 455 inhabitants (). A coal mining town, the settlement is almost entirely made up of ethnic Russians and Ukrainians. History Rijpsburg, ...
. It has carried out mining operations in the towns of
Pyramiden Pyramiden (; rus, Пирами́да, r=Piramída, p=pʲɪrɐˈmʲidə; literally 'The Pyramid') is an abandoned Soviet coal mining settlement on the Norwegian archipelago of Svalbard which has become a tourist destination. Founded by Sweden in ...
and
Grumant Grumant (russian: Грумант) is a former Soviet company town in Svalbard, Norway, established in 1912 and abandoned in 1965. The population—including Coles Bay, which served the settlement's port—peaked at 1,106 in 1951. The name Grumant ...
, which it still owns, and once operated a port at Colesbukta. The company is headquartered in
Moscow Moscow ( , US chiefly ; rus, links=no, Москва, r=Moskva, p=mɐskˈva, a=Москва.ogg) is the capital and largest city of Russia. The city stands on the Moskva River in Central Russia, with a population estimated at 13.0 million ...
and is the official agency through which Russia, and previously the
Soviet Union The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen nationa ...
, exercised its Svalbard policy. The company was established on 7 October 1931 to take over all Soviet mining interests on Svalbard. At the time Grumant and Pyramiden were bought, although only Grumant was in operation. It also bought Barentsburg from Dutch interests. The company retained operation there and in Grumant until 1941, when all employees were evacuated to the mainland as part of
Operation Gauntlet Operation Gauntlet was an Allied Combined Operation from 25 August until 3 September 1941, during the Second World War. Canadian, British and the Norwegian armed forces in exile (, Outside Front) landed on the Norwegian island of Spitzbergen in ...
. Mining resumed in 1947 and commenced in Pyramiden in 1955. Declining coal deposits resulted in Grumant being closed in 1961. From the 1960s through the 1980s, Arktikugol carried out a series of oil drilling attempts on the archipelago but never succeeded at finding profitable reservoirs. From the 1990s, the company lost many of its subsidies and cut production, resulting in Pyramiden being closed in 1998. The company has attempted to diversify without success.


History


Background

The first Russian expedition exploring Svalbard for coal was conducted by Vladimir Alexandtrovitch Rusanov in 1912. It explored the areas around
Bellsund Bellsund is a long sound on the west coast of Spitsbergen, part of the Svalbard archipelago of Norway. It is separated from Van Mijenfjorden by the islands of Akseløya and Mariaholmen. Bellsund is located south of Nordenskiöld Land and north ...
and
van Mijenfjorden Van Mijenfjorden is the third-longest fjord in Norway's Svalbard archipelago. It lies in the southern portion of Spitsbergen island, south of Nordenskiöld Land and north of Nathorst Land. The fjord is long, being separated from Bellsund furthe ...
. It later went northwards to Isfjorden and visited Grønfjorden and
Adventfjorden Adventfjorden (Advent Bay) is a 7 km long and 4 km wide bay running south-eastwards from the southern side of Isfjorden, on the west coast of Spitsbergen in Svalbard. The name represents a corruption of ''Adventure Bay'' - probably name ...
, and it occupied a claim at Colesbukta on 7 August. On 16 March 1913 the financiers of the expedition established the company Handelshuset Grumant – A. G. Agafeloff & Co. to exploit the mine. They sent an expedition that summer and started breaking coal at Colesbukta with a force of 25 men. In 1920 The Anglo Russian Grumant Company Ltd. was established to purchase the operations at
Grumant Grumant (russian: Грумант) is a former Soviet company town in Svalbard, Norway, established in 1912 and abandoned in 1965. The population—including Coles Bay, which served the settlement's port—peaked at 1,106 in 1951. The name Grumant ...
, the mining town which grew up at Colesbukta. At the time a challenge for the Russian interests on Spitsbergen was that the Soviet Union was not yet party to the
Svalbard Treaty The Svalbard Treaty (originally the Spitsbergen Treaty) recognises the sovereignty of Norway over the Arctic archipelago of Svalbard, at the time called Spitsbergen. The exercise of sovereignty is, however, subject to certain stipulations, and ...
. In 1925 the company sold its rights around Kvalvågen and Agarddhbukta to Severoles, which created the Moscow-based company Russki Grumant Ltd. It issued a series of claims to the Commissioner of Mines, most of which were contested by the Government of Norway and various mining companies. A particular intense issue was that of what would become the settlement of Pyramiden on
Billefjorden Billefjorden is the central fjord of the three branching from the innermost part of the Isfjorden to the northeast, in Svalbard, Norway. It is 30 km long and 5–8 km wide. Billefjorden lies between Dickson Land to the northwest and B� ...
. Both Svenska Stenkolsaktiebolaget Spetsbergen and Severoles claimed the area. In a settlement, Severoles was given the claims to Pyramiden. The Government of Norway protested, stating that a foreign state could not claim land on Svalbard. Thus Russki Grumant took over the claims. By 1927 all Russian claim disputes were resolved.Hoel: 355 The Russian authorities announced on 22 June 1931 that the company Sojusljesprom would be operating Grumant. The first shipment of crew arrived on 12 July. Work started immediately to build a settlement, while a port was to be built at Colesbukta, away. The first season was regarded as a trial. On 17 November 1931 The Anglo Russian Grumant Co. sold all its mining claims to the newly established Arktikugol.Hoel: 356 The company had been incorporated on 7 October the same year and had its head office in Moscow.


Pre–Second World War

Barentsburg was established by the Nederlandsche Spitsbergen Compagnie, who closed operations in 1926. The company announced in 1931 that the town was for sale, and Arktikugol offered to purchase the entire company. Barentsburg was sold on 25 July 1932, including the claims and land at Bohemanflya. When purchasing Grumant, the Russian company had agreed to forfeit its right to operate a long-distance radio station. This arrangement did not apply to Barentsburg, allowing Arktikugol to establish a telegraphy station there. The issue was raised to a diplomatic level, but resolved itself after it became clear that Grumant Radio would only be relaying via Barentsburg. Arktikugol continued to build infrastructure in Grumant and mined ca. 10,000 tonnes of coal in the winter of 1931–32.Hoel: 361 By 1932 the population had reached 300 in Grumant and 500 in Barentsburg. The company had commenced prospecting in Colesbukta, and hoped to bring production to 120,000 tonnes from Grumant and 300,000 tonnes from Barentsburg per year. The
Governor of Svalbard The governor of Svalbard ( no, Sysselmesteren på Svalbard) represents the Norwegian government in exercising its sovereignty over the Svalbard archipelago (Spitsbergen). The position reports to the Norwegian Ministry of Justice, but it mai ...
conducted the first inspection of the two towns in July 1933. By the winter of 1933–34 the population of Barentsburg had risen to 1,261, including about 100 children. The summer population was about 1,500, and the mines produced 180,000 tonnes in 1934. The same year Grumant had 230 employees and produced 38,000 tonnes. The following year production increased to 349,000 tonnes for both towns. Meanwhile, Arktikugol was working on prospecting at Pyramiden. Prospects were carried out at Kapp Heer during the winter of 1938–39, concluding with that there was only a single seam of coal. Barentsburg had a population of 1515 in 1939, of which 259 were women and 65 were children. Grumant had a population of 399, of which 56 were women and 12 children.Hoel: 373 By 1939 a town and mining complex was under construction at Pyramiden. Production started in 1940,with a crew of 80 men. The break-out of the
Second World War World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposi ...
initially had little influence on the operations. Norwegian and British authorities agreed on 12 August that all Allied settlements on Svalbard would be evacuated.
Operation Gauntlet Operation Gauntlet was an Allied Combined Operation from 25 August until 3 September 1941, during the Second World War. Canadian, British and the Norwegian armed forces in exile (, Outside Front) landed on the Norwegian island of Spitzbergen in ...
was initiated, with the troop carried ''Empress of Canada'' arriving on 25 August. It evacuated the entire Soviet population and brought them to the mouth of the
Northern Dvina River The Northern Dvina (russian: Се́верная Двина́, ; kv, Вы́нва / Výnva) is a river in northern Russia flowing through the Vologda Oblast and Arkhangelsk Oblast into the Dvina Bay of the White Sea. Along with the Pechora River ...
. Four days later it evacuated the Norwegian settlements. Key infrastructure, such as docks and power stations, were destroyed and the coal heaps set ablaze. The goal was to hinder German operation while making resuming of operation easy. On 8 September 1943 the German
Wehrmacht The ''Wehrmacht'' (, ) were the unified armed forces of Nazi Germany from 1935 to 1945. It consisted of the ''Heer'' (army), the '' Kriegsmarine'' (navy) and the ''Luftwaffe'' (air force). The designation "''Wehrmacht''" replaced the previo ...
carried out
Operation Zitronella Operation Zitronella (Operation Lemon Flavour), also known as (Operation Sicily), was an eight-hour German raid on Spitzbergen, in the Svalbard Archipelago, on 8 September 1943. The battleships (in its only offensive action) and , plus nine des ...
, whereby all the settlements on Isfjorden, including Barentsburg and Grumant, were destroyed by fire from the battleships ''Tirpitz'' and ''Scharnhorst'' and nine destroyers.Hoel: 379


Cold War

By the end of the war the settlement in Pyramiden was still standing. Barentsburg and Kapp Heer were destroyed and full reconstruction of the town was necessary. Grumant was in the same situation. The only structure that was usable was a water tower. Although an inspection was carried out in 1945, Arktikugol did not commence reconstruction until November 1946. It stationed an ice-breaker in Pyramiden to keep an ice-free path between the two towns. By the summer of 1947 there were 350 people working in Pyramiden, although mining had yet to commence. By November the populations had reached 500 in Pyramiden and Barentsburg, and 200 in Grumant. Barentsburg and Grumant were sufficiently rebuilt by 1948 to allow mining to commence. Prospecting was carried out in Colesbukta and by 1949 there were 2,438 Soviet citizens on the archipelago, of which 51 were children. Barentsburg had 1,180 people, Grumant 965 and Pyramiden 293.Hoel: 390 At the end of the war there was established a Soviet consulate in Pyramiden. It was moved to Barentsburg in 1950. A new dock, allowing 10,000-tonnes ships, was built in Colesbukta. Meanwhile, a railway line was being built between Grumant and Colesbukta, to allow the Grumant coal to be shipped out from the better port at Colesbukta. The Commissioner of Mines carried out annual inspections of all mines each summer. For the first time, Arktikugol attempted, in violation of the
Mining Code The Mining Code, also known as the Mining Law or Miners' Law ( sr-cyr, Закон о рудницима) or Novo Brdo Code (), was a compilation of medieval laws on mining in the Serbian Despotate, enacted by Despot Stefan Lazarević on 29 Janua ...
, to hinder such an inspection on 10 July 1952. Arktikugol had also initiated simple building at Kapp Boheman and broken 4,000 tonnes of coal. That year the mines in Barentsburg produced 130,000 tonnes and 122,000 tonnes were produced in Grumant. Production in Pyramiden commenced in 1955, with an output of 38,000 tonnes the first year. Two years later production there reached 107,000 tonnes, exceeding that of Grumant, at 93,000 tonnes. Along with Barentsburgs 193,000 tonnes, Arktikugols annual production reached 394,000 tonnes. The population in Pyramiden had reached 728, while it was 965 in Grumant and 1,039 in Barentsburg. Arktikugol built a new power station at Colesbukta, but the quality of the coal mined at Grumant was diminishing. The company therefore decided to terminate operations there from the fall of 1961 and abandon the settlements in Grumant and Colesbukta. In its final full year of production, in 1960, Grumant contributed with 125,000 tonnes of coal towards Arktikugol's total 480,000 tonnes. Grumant produced 73,000 tonnes in 1961, and featured a population 1,047 in 1959. The closing of Grumant resulted of a significant fall in the Russian population, from 2,667 people in 1960 to 1,700 in 1965. However, Arktikugol retained a small workforce at Grumant until 1967. The American oil company
Caltex Caltex is a petroleum brand name of Chevron Corporation used in the Asia-Pacific region, the Middle East, and Southern Africa. It is also the brand name of non-Chevron petroleum companies in some countries (such as New Zealand, and previously A ...
and later Norsk Polar Navigasjon commenced oil prospecting on Svalbard in 1960. This caught the interest of Soviet authorities, who started working on their own petroleum prospecting plans from 1962. Arktikugol was at the time not making any money from the coal mining, and it saw advantages of establishing an alternative, potentially more profitable industry. As in coal mining, the
Svalbard Treaty The Svalbard Treaty (originally the Spitsbergen Treaty) recognises the sovereignty of Norway over the Arctic archipelago of Svalbard, at the time called Spitsbergen. The exercise of sovereignty is, however, subject to certain stipulations, and ...
hindered any non-discrimination compared with other country's economic activities. The company registered 71 petroleum claims in January 1963, based on geological indications. At the time there was uncertainty is this was sufficient, or if samples would need to be provided for the claims to be approved. The claims were rejected in May, but was met with protests as the Soviet Union claimed they were being discriminated against in comparison with Caltex. The issue received a temporary closing on 17 July 1965, when Arktikugol accepted to pay royalties on any production.
Svalbard Airport, Longyear Svalbard Airport ( no, Svalbard lufthavn; ) is the main airport serving Svalbard in Norway. It is northwest of Longyearbyen on the west coast, and is the northernmost airport in the world with scheduled public flights. The first airport near Lo ...
opened on 2 September 1975. An agreement is made so that Arktikugol can fly its workers to the mainland via the airport with
Aeroflot PJSC AeroflotRussian Airlines (russian: ПАО "Аэрофло́т — Росси́йские авиали́нии", ), commonly known as Aeroflot ( or ; russian: Аэрофлот, , ), is the flag carrier and the largest airline of Russia. The ...
. The airline also starts operating a helicopter shuttle service between Longyearbyen and Barentsburg with the construction of
Barentsburg Heliport, Heerodden Barentsburg Heliport, Heerodden ( no, Barentsburg helikopterhavn, Heerodden; ) is a private heliport located at Heerodden (also known as Kapp Heer), serving the mining town of Barentsburg in Svalbard, Norway. The airport is owned and operated by ...
. A Soviet helicopter crashed at Hansbreen in August 1977, although no-one was killed. Norwegian authorities give an operating permit to the heliport in 1978. Arktikugol commenced prospecting in Colesbukta from 1981 and 1988, and between 40 and 50 people were quartered in the abandoned town in the summers. The company experience another helicopter accident, at
Hornsund Hornsund is a fjord on the western side of the southernmost tip of Spitsbergen island. The fjord's mouth faces west to the Greenland Sea, and is wide. The length is , the mean depth is , and the maximal depth is . Hornsund cuts different geolog ...
, in 1982. Arktikugol carried out oil drilling at Vassdalen at
van Mijenfjorden Van Mijenfjorden is the third-longest fjord in Norway's Svalbard archipelago. It lies in the southern portion of Spitsbergen island, south of Nordenskiöld Land and north of Nathorst Land. The fjord is long, being separated from Bellsund furthe ...
from 1985 to 1989.Thuesen: 160 The company opened new cultural centers, both including swimming pools, in Barentsburg and Pyramiden in 1987. A hotel was opened in Pyramiden in 1989 and the company started initiatives to attract tourists to the town. That year there were 715 residents in Pyramiden and 918 in Barentsburg.


Post-dissolution

With the
dissolution of the Soviet Union The dissolution of the Soviet Union, also negatively connoted as rus, Разва́л Сове́тского Сою́за, r=Razvál Sovétskogo Soyúza, ''Ruining of the Soviet Union''. was the process of internal disintegration within the Sov ...
in 1991, Deputy Foreign Minister Andrei Fyodorov stated that the Russian state no longer had any interests in remaining in Svalbard. Reforms in the coal industry were a priority and on 30 December 1992
Boris Yeltsin Boris Nikolayevich Yeltsin ( rus, Борис Николаевич Ельцин, p=bɐˈrʲis nʲɪkɐˈla(j)ɪvʲɪtɕ ˈjelʲtsɨn, a=Ru-Boris Nikolayevich Yeltsin.ogg; 1 February 1931 – 23 April 2007) was a Soviet and Russian politician wh ...
announced the coal industry's privatization and that subsidies would cease from 1994. Arktikugol was as an exception allowed to continue with subsidies and with state ownership. However, the company no longer was to sell coal to Russia, but instead to Western Europe. This would allow the company access to
hard currency In macroeconomics, hard currency, safe-haven currency, or strong currency is any globally traded currency that serves as a reliable and stable store of value. Factors contributing to a currency's ''hard'' status might include the stability and ...
, although the coal's poor quality and high sulfur content gave low prices. Production at this point amounted to ca. 400,000 tonnes per year, of which about a fifth went to local consumption.Jørgensen: 49 The company started looking for alternative sources of revenue. It was inspired by Longyearbyen, which was carrying out a diversification process. Arktikugol announced several plans, including opening for tourism and converting one of the residential apartment buildings to a hotel; establishing a tourist market; plans for bottling water and plans for the construction of a fishing station. An application for tourist flights with the Mi-8 helicopters was sent, but rejected by the Governor of environmental and safety reasons. The hotel received few visitors. Surveying in Pyramiden commenced in 1990 and concluded in 1996. Without sufficient income, the company was forced to cut its welfare services. Maintenance was cut to a minimum, and in 1995 the schools and kindergartens were closed and children and most wives returned to the mainland. Both towns became dominated by young men.Jørgensen: 50 The Arktikugol-chartered
Vnukovo Airlines Flight 2801 Vnukovo Airlines Flight 2801 was an international charter flight from Vnukovo International Airport in Moscow, Russia, to Svalbard Airport on Spitsbergen, in the Norwegian archipelago of Svalbard. On 29 August 1996 at 10:22:23 CEST, a Tupolev ...
crashed into Operafjellet On 29 August 1996, killing all 141 people on board. All of the passengers were Arktikugol employees. On 18 September 1997, twenty-three miners were killed in an explosion—the most deadly mining accident ever on Norwegian soil. In the first accident the Russians sent their own rescue crew and equipment and proposed a joint Norwegian-Russian investigation. This was rejected by the Governor. Following the 1997 accident the Governor led the investigation without questions from Arktikugol—a significant shift the relationship between the two countries.Jørgensen: 53 The Government of Russia passed a new, confidential Svalbard politic on 31 December 1997. It change the policy towards a long-term presence, and proposed closing coal mining and replacing it with other industry. By the 1990s both Barentsburg and Pyramiden were running low on coal reserves. New finds in Colesbukta teased Arktikugol to plan for expansion there. This, along with Barentsburg's better port and with Arktikugol's main administration, caused the company to prefer to keep it in operations. Closure of Pyramiden was discussed at a meeting in Moscow on 28 July 1997. The plan for closing was finalized and approved by the
Ministry of Energy A Ministry of Energy or Department of Energy is a government department in some countries that typically oversees the production of fuel and electricity; in the United States, however, it manages nuclear weapons development and conducts energy-relat ...
on 23 March 1998. The last breaking of coal took place on 1 April and by the late summer the town had been shut down, and all activities moved to Barentsburg. Arktikugol's head office was moved to Murmansk in 1999, but then returned to Moscow in 2004. During this period the company underwent a series of restructurings. From 2000 the government decided that all Russian activities on Svalbard will be financed through subsidies to Arktikugol. Arktikugol continued to reduce its welfare level: employees' wages were cut, free food was withdrawn and the barn closed. A group of workers went on strike, just to be sent home by the first ship. In 2004 two men in Barentsburg were apprehended for manslaughter. The rescue corps in Barentsburg had function as its police, but for the first time the Governor arrived and arrested a Russian subject in Barentsburg. The
Accounts Chamber of Russia Accounts Chamber of the Russian Federation (russian: Счётная палата Российской Федерации) is the parliamentary body of financial control in the Russian Federation. History The prototype of the Accounts Chamber of t ...
published a report in 2005 which was highly critical of the management of Arktikugol. Large sums of money could not be accounted for, government instructions and plans had not been implemented and the Russian presence had not been managed in a suitable way, especially related to diversification. The company did not have an auditor, had an unaccounted for account in the bank in Longyearbyen and did not keep books for its tourist revenue. The infrastructure was dilapidated, the subsidies per produced tonne of coal were increasing rapidly and 17.5 percent of all man-hours were being used on resolving accidents.Jørgensen: 83 A delegation was dispatched in March 2006, followed by two more that year. In January 2006 a fire started in one of the seams. Proper extinction was not carried out and was estimated to be able to burn for years or even decades, halting production. At the same time the issue was straining the relationship with Norway and the Governor. The company's management was replaced in late 2006 and the state grants were given for fire fighting equipment to quench the political embarrassment. Within six months the fire was extinguished. The new management also announced plans to invest in new infrastructure, including a shopping mall equaling that in Longyearbyen. A small group of employees were moved to Pyramiden in 2007 to keep it maintained and clean it up, including the construction of a dam to keep a river from flooding the town. A total renovation of the power station started the same year. A new management was appointed in 2008. From that year a series of safety and environment requirements investments were made, largely to comply with Norwegian standards. However, on 30 March a Mi-8 crashed at Heerodden, killing three. Two months later a fire broke out and killed three miners. Caused by faulty technical conditions, the fire was not extinguished until it had been filled with water—a process that took a year.


Operations

Over its history, Arktikugol has mined more than 22 million tonnes of coal. In 2006, Arktikugol produced 120,000 tonnes of coal per year. The company has operated at a deficit since the 1990s. Observers including Øyvind Nordsletten, the former Norwegian ambassador to Russia, have theorized that the Russian government continues funding its operations in order to maintain a foothold in the Arctic, not out of an actual need for Svalbard's resources.


Incidents

In 1989, five people were killed in an explosion at the Barentsburg mine. On 18 September 1997, 23 Russian and Ukrainian miners were killed in an explosion at the Barentsburg mine. This was the most serious mining accident ever on Norwegian soil. In April 2008, two people died in the fire at the Barentsburg mine. On 17 October 2006 Norwegian inspectors detected an underground, smoldering fire in Barentsburg, prompting fears that an open fire might break out, which would have forced the evacuation of all of Barentsburg for an indefinite period of time, and also caused unknown environmental problems for the entire archipelago.


References


Bibliography

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External links

* {{Portal bar, Energy, Norway, Russia, Soviet Union Coal companies of Norway Coal companies of Russia Mining in Svalbard Companies based in Svalbard Energy companies established in 1931 Non-renewable resource companies established in 1931 1931 establishments in the Soviet Union 1931 establishments in Norway Mining companies of the Soviet Union Energy in the Soviet Union Barentsburg Pyramiden Norway–Soviet Union relations Companies based in Moscow Federal State Unitary Enterprises of Russia