Norway has blocked the sale the last privately-owned property on Svalbard. Invoking national security concerns amid increased activity by Russia and China in Arctic Ocean.
Oslo’s centre left government told the owners of a property in the Arctic archipelago of Sore Fagerfjord that they could only sell it with the Norwegian state’s approval after they claimed there was Chinese interest.
Cecilie Myrseth, ‘s business minister, said on Monday that the owners of Sore Fagerfjord had been saying for some time that they wanted to sell their property and were open to selling it to anyone who would challenge Norwegian laws on Svalbard. It could threaten Norwegian interests and interfere with the stability in the area.
Norwegian media reported that one the main owners, a Russian woman, of AS Kulspids (the company that owns Sore Fagerfjord) is a Norwegian citizen who obtained Norwegian citizenship in 1990. The order prohibiting the sale of Sore Fagerfjord without Norwegian government approval is applicable to AS Kulspids as well as its owners.
The Arctic is the site of increasing geopolitical tension, as countries compete to increase their control over this “high north” area and exploit its natural resources. Russia has militarised a large part of its far north, while China is increasing its research and business activities in the area. Donald Trump, the former US president, offered to purchase Greenland from Denmark.
Svalbard, although Norwegian territory, has Russian settlements as well as mining developments due to its unique legal status. The majority of the land is owned by Norway, but Russia owns four large properties.
Sore Fagerfjord was listed for sale for €300mn earlier this year, south of Longyearbyen, the main town, and Barentsburg (Russian settlement). The property is 60 sq km in size and includes the island of Reinholmen. The Norwegian government bid NKr20mn, or €1.8mn. Public broadcaster NRK also said that it bid the same amount in the previous week.
Local media reported that a lawyer for the Norwegian Government suggested the land’s commercial value was almost zero because it is hard to access and is subject to strict environmental regulations. Oslo paid NKr300mn for a parcel near Longyearbyen that was almost four times larger than Sore Fagerfjord and contained coal deposits. It is also much more accessible.
Myrseth warned anyone willing to pay “a disproportionately high price” to buy Sore Fagerfjord might be attempting to undermine Norwegian law and the national security.
“China could be a buyer.” China has been showing great interest in Arctic exploration for many years. Per Kyllingstad told the local newspaper Aftenposten that if China can gain a foothold in the Arctic, this would be of great strategic importance for them.
Norway has warned against the dangers of a possible sale to national security. Svalbard has been cited by Russian media as the possible start of a third war after the 2014 annexation Crimea. Meanwhile, Moscow has repeatedly tried to test Norway’s patience by flying flags on the islands and holding a pseudomilitary display.
Svalbard Treaty of 1920 demilitarised the islands, giving Norway sovereignty. Other states like Russia have the option to mine the land and establish settlements.
Norway announced last week that it would explore blocks for deep-sea mining near Svalbard, and other areas in the Arctic. This move was heavily criticized by environmental groups.
AS Kulspids didn’t immediately respond to a comment request. The property is still listed for sale on .
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