page_title: Arktikugol
section_title: Post-dissolution
hierarchical_section_title: Arktikugol / History / Post-dissolution
caption_attribution_description: English: Piramida (Pyramiden9, an abandoned Sovjet-style settlement at Spirsbergen, Svalbard (Norway). The place was a coal mining community, abandones in 1998.
context_page_description: Arktikugol is a Russian coal mining unitary enterprise which operates on the islands of Spitsbergen in Svalbard, Norway. Owned by the Government of Russia, Arktikugol currently has limited mining in Barentsburg. It has carried out mining operations and still owns the towns of Pyramiden and Grumant, with its port at Colesbukta. The company is headquartered in Moscow and is the official agency through which Russia, and previously the Soviet Union, 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. Mining resumed in 1947 and commenced in Pyramiden in 1955. Declining coal deposits resulted in Grumant being closed in 1961.
  Throughout the 1960s to 80s Arktikugol carried out a series of oil drilling on the archipelago, but never succeeded at finding profitable reservoirs.
context_section_description: With the dissolution of the Soviet Union 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 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, 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.
  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. The Arktikugol-chartered Vnukovo Airlines Flight 2801 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 fatal 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.
  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 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 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, especi
caption: Arktikugol built a wide arrange of cultural services for its employees, such as swimming pools
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