Norway blocks the sale of exclusive real estate in Svalbard in the Arctic. July 1st, 2024
- Ana Cunha-Busch
- Jun 30, 2024
- 3 min read
By AFP -Agence France Presse
Norway blocks the sale of exclusive real estate in Svalbard in the Arctic.
The Norwegian government said on Monday that it has blocked a plan to sell the last piece of privately owned land in the strategic Arctic archipelago of Svalbard, to prevent its possible acquisition by foreign players such as China.
The remote Sore Fagerfjord property in southwest Svalbard - 60 square kilometers (23 square miles) of mountains, plains, and a glacier - was up for sale for 300 million euros (US$ 326 million).
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.
Twice the size of Belgium, Svalbard is governed by an unusual legal structure that allows foreign entities to settle in the region.
A treaty signed in 1920 recognizes Norwegian sovereignty over the territory but also grants citizens of the signatory powers - which include Russia and China - the same rights to exploit its mineral resources.
Russia, for example, has maintained coal mining communities in Svalbard through the state-owned Trust Arktikugol for decades.
However, Norway, which is keen to protect its sovereignty, would not welcome the property falling into foreign hands, and the government said on Monday that a possible sale would require state approval under the national security law.
"The current owners of Sore Fagerfjord are willing to sell to actors who could challenge Norwegian law in Svalbard," said Trade and Industry Minister Cecilie Myrseth.
"This could disrupt stability in the region and potentially threaten Norwegian interests," she added.
The ministry again made an offer of 20 million kroner ($1.9 million) for the property last week, Fredrik Sejersted, the attorney general acting on behalf of the government, told AFP on Monday.
That offer - a small fraction of the owners' asking price of 300 million euros - was turned down.
Lawyer Per Kyllingstad, who represents the sellers, previously told AFP that he had received "concrete signals of interest" from potential Chinese buyers who "have been showing a real interest in the Arctic and Svalbard for a long time".
The piece of land is a unique opportunity to obtain the "last private land in Svalbard and, as far as we know, the last private land in the High Arctic in the world," he said.
Kyllingstad did not immediately respond to the government's announcement.
The seller of the property is a company controlled by a Russian-born Norwegian, according to local media.
Critics are skeptical about the price and the viability of the sale. The property, located in the southwest of the archipelago, a region without roads or infrastructure, covers protected areas where construction and motorized transport are prohibited, depriving it of commercial value.
The Norwegian state owns 99.5% of Svalbard and has declared most of the land, including the Sore Fagerfjord property, as protected areas where construction and motorized transport, among other things, are prohibited.
However, the sellers cite the 1920 treaty to argue that the owners can exploit and develop their property.
In 2016, the government paid 33.5 million euros to acquire the second last piece of private land in Svalbard, near Longyearbyen, the archipelago's main town, which was also being sought by Chinese investors.
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.
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