For sale: unique land in a strategic Arctic archipelago May 18, 2024

The Svalbard archipelago is located halfway between mainland Norway and the North Pole (Viken KANTARCI)

By AFP - Agence France Presse

For sale: unique land in a strategic Arctic archipelago

The last piece of privately owned land in the strategic Svalbard archipelago in the Arctic is up for sale, a property that is likely to attract China, but which Norway does not intend to let go without a fight.

The archipelago is located halfway between mainland Norway and the North Pole, in a region of the Arctic that has become a geopolitical and economic hotspot as the ice melts and relations between Russia and the West grow ever colder.

For 300 million euros (US$ 326 million), interested parties can purchase the remote Sore Fagerfjord property in southwest Svalbard.

Measuring 60 square kilometers (23 square miles) - roughly the size of Manhattan - the property is home to mountains, plains, a glacier, and about five kilometers of coastline, but no infrastructure.

“It's the last private land in Svalbard and, as far as we know, the last private land in the High Arctic in the world,” said lawyer Per Kyllingstad, who represents the sellers.

“The Chinese are of course potential buyers, as they have long shown real interest in the Arctic and Svalbard,” he told AFP, adding that he had received “concrete signals of interest” from the country.

- Special treaty -

Since China's 2018 white paper on the Arctic - a sign of its interest in the region - the country has defined itself as a “quasi-Arctic state” and plans to play an increasing role in the region.

Svalbard is governed by a 1920 international treaty that leaves ample room for foreign interests.

It recognizes Norway's sovereignty over Svalbard, but the citizens of all signatories, including China, have the same right to exploit the region's natural resources.

Russia, for example, has maintained a coal mining community in Svalbard through the state-owned Trust Arktikugol for decades.

But times have changed.

To protect its sovereignty, Norway would not welcome the Sore Fagerfjord property falling into foreign hands.

Especially in the hands of China, which, according to Norway's intelligence services, poses the greatest security risk to the Scandinavian country after Russia.

Therefore, Norway's Attorney General ordered the owners - a company controlled by a Russian-born Norwegian, according to local media - to cancel the planned sale.

“The land cannot be sold without the approval of the Norwegian authorities,” Trade and Industry Minister Cecilie Myrseth told AFP.

“Nor is it possible to hold negotiations on the property,” she added.

This argument is based on clauses in an old loan granted by the state in 1919. Kyllingstad insists that the statute of limitations on the clauses has expired.

- Red flag

The Norwegian state owns 99.5% of Svalbard and has declared most of the land, including the Sore Fagerfjord estate, as protected areas where construction and motorized transport, among other things, are prohibited.

But the sellers don't see it that way and cite the 1920 treaty.

“All parties (who signed the treaty) have the same rights,” Kyllingstad emphasized, noting that Norway has built housing, an airport, and a port in Longyearbyen, the archipelago's main town.

“Imagine if Norway now adopted rules limiting the activities of Russian holding companies,” he said. “It would be World War III.”

According to Andreas Osthagen of the Fridtjof Nansen Research Institute, the land in Sore Fagerfjord has “minimal” economic value and its possible sale does not represent “a major threat” to Norway.

But, he noted, “owning land in Svalbard could have a strategic value in 50 or 100 years”.

In the meantime, any mention of possible Chinese interest in property in Svalbard raises “a red flag to force the Norwegian authorities to do something”.

In 2016, the government paid 33.5 million euros to acquire the second last piece of private land on Svalbard, near Longyearbyen, which is also said to be sought after by Chinese investors.

Critics later accused the government of being misled by baseless arguments.

In 2018-2019, the state had already entered into negotiations to buy Sore Fagerfjord, but the talks failed because of the price.

Trade and Industry Minister Myrseth said the option was still open if the terms were “realistic”.

Pierre-Henry DESHAYES

phy/po/yad/lb