Norway blocks unique Arctic land sale to prevent Chinese acquisition in Svalbard

OSLO, July 1 — The Norwegian government called off today a plan to sell the last privately owned piece of land on the strategic Arctic archipelago of Svalbard in order to prevent its acquisition by China.

The remote Sore Fagerfjord property in southwestern Svalbard — 60 square kilometres of mountains, plains and a glacier—was on sale for €300 million (RM1.5 billion).

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

Svalbard is governed under an unusual legal framework that allows foreign entities to gain footholds in the region.

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A treaty signed in 1920 recognises Norwegian sovereignty over the territory but it also gives citizens of the signatory powers — which include Russia and China — the same rights to exploit its mineral resources.

Russia, for example, has maintained a coal mining community on Svalbard, via the state-run company Trust Arktikugol, for decades.

Yet Norway, keen to protect its sovereignty, would not look kindly on the property falling into foreign hands, and the government said Monday a potential sale will require state approval under national security law.

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“The current owners of Sore Fagerfjord... are open to selling to actors that could challenge Norwegian legislation in Svalbard,” Trade and Industry Minister Cecilie Myrseth said.

“It could disturb stability in the region and potentially threaten Norwegian interests,” she added.

Lawyer Per Kyllingstad, who represents the sellers, has previously told AFP that he had received “concrete signs 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 occasion to grab the “last private land in Svalbard, and, to our knowledge, the last private land in the world’s High Arctic,” he said.

Kyllingstad did not immediately respond to the government announcement.

The property’s seller is a company controlled by a Russian-born Norwegian, according to local media.

Critics are sceptical about the price and feasibility of the sale. The property, in the southwest of the archipelago where no infrastructure exists, covers protected areas where construction and motorised transport are prohibited, stripping it of commercial value.

In 2016, the government paid 33.5 million euros to acquire the second-last piece of private land on Svalbard, near Longyearbyen, which was also reportedly being eyed by Chinese investors. — AFP