Ten years after the mine in Kirkenes went bankrupt, new owners believe that it can once again be operated profitably. But they will not decide until the summer whether to invest in it.
The privately owned mining company Sydvaranger was established in 1906. Four years later, the first train with iron ore left Bjørnevatn to Kirkenes. With Swedish owners and German capital, an industrial community was built up in Kirkenes. The population increased fivefold by 1940.
The state became the main owner from 1948 until the mining operation closed in 1997. At its peak, there were over 1,500 employees in the state-owned cornerstone company.
In Sør-Varanger municipality, there were fears of large-scale emigration and economic decline when the mining operation was discontinued. This did not happen. The proximity to Russia and the close contact with the country have led to a flourishing of state administration, education, art and culture.
Varanger Kraft and later Sør-Varanger Municipality took over ownership of Sydvaranger, which was sold to Tschudi Shipping Company in 2006. The following year, Northern Iron Ltd was founded to reopen the mine. With mainly Australian owners, the mine was re-operated in the fall of 2009. On Tuesday, August 31, 2010, the new mine was officially opened. On Wednesday, November 18, 2015, the company filed for bankruptcy.
On May 6, 2024, the Swedish mining company Grangex announced that it was acquiring Sydvaranger Mine from the American owners Anglo American.
Ten years after the mine in Kirkenes went bankrupt, new owners believe that it can once again be operated profitably. But they will not decide until the summer whether to invest in it. Mining can be operated in Sør-Varanger for 19 years.
This is shown by calculations made by the new owners of Sydvaranger Mine. The report has mapped out whether mining will be economically sustainable.
The company Grangex, which is Swedish, believes that they can earn over 1.2 billion kroner in the coming years (before tax).
It confirms the potential for Sydvaranger to become a world-class producer and become a key player in enabling the European and global steel industry to transition to more sustainable methods of steel production, writes Director Christer Lindqvist in a press release.
In July, Grangex will make the final decision on whether to start production. If they say yes, start-up could be as early as next year, and full production from 2027. But the start-up itself could be very expensive.
There are high hopes in Sør-Varanger that the mine, which is located at Bjørnevatn, will resume operations.
A restart could mean around 400 new jobs. As many as were lost during the bankruptcy in 2015.
The jobs are badly needed, because the Kirkenes community has been hit hard by Western sanctions against Russia. Several local businesses made their living from Russian partners.
The historic mine, which was started in 1906, has been idle since the bankruptcy.
Several companies have tried to revive the mine since then, without any success. Much of this is due to the low international price of ore, but also to the large sums of money required to start up. Especially in terms of digging up the iron ore.
After the bankruptcy in 2015, the owners, Northern Iron, were accused of skimming the cream.
They did not follow the operating plan and extracted more iron ore than waste rock, i.e. the worthless rock that lies around the iron ore.
As a result, the new owners have to dig deep and expensively before they reach what will provide income. Previous estimates show a price tag of around NOK 2 billion ($ 178 mln).
Local politicians have asked the state to provide funds to remove the waste rock. Financial support from the state will help make it easier for Grangex to start operations.
So far, the government has not given a clear answer to this.
Source: NRK (in Norwegian)
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