Establishment The iron ore at Bjørnevatn was originally discovered by assistant director of the
Geological Survey of Norway,
Tellef Dahll, in 1868. It was at the time not commercially viable to mine. With the development of
magnetic separation, merchant
Christian Anker from
Halden started acquiring deeds for the area. In 1903, he contacted the government and started negotiating an agreement to start operations. After several rounds of proposals he received permission and the contract was signed on 9 March 1905. Anker's principal assistant, Engineer Henrik Lund, arrived at Kirkenes in 1903 and started designing the plant. He was assisted by Hans Johan Bernhard Hansen from 1905. They decided that the port should be located at Kirkenes and that a railway would have to be built between the mine and the port. By 1905, then Anker had negotiated an investment agreement with Nils Persson of Sweden, who took over Anker's rights immediately after Anker had signed the contract. The company was established on 12 January 1906 with A. P. Pehrson appointed the company's first managing director. The share capital was set to 5 million
Norwegian krone (NOK) and the majority shareholder was Metallurgiska. The first task was to mine a trial , which were shipped to
Luleå for analysis. Inge Thoresen Wiull was hired as chief engineer in September 1906. He initially started working on housing in Kirkenes, which by 1908 had reached 31 houses for workers, each with four apartments, and six white-collar houses. From November 1906 Wiull was also responsible for constructing the railway and the port, based on his experience from managing the construction of the
Valdres Line. Investments were in 1907 estimated to NOK 12 million, of which NOK 4.3 was for transport investments, NOK 4.5 million for the separation and briquetting plants, and NOK 1.5 million for investments in the mine. Capital was borrowed from a consortium consisting of
Norddeutsche Bank,
Disconto-Gesellschaft,
Centralbanken for Norge and
Stockholms Enskilda Bank. In addition the share capital was increased to NOK 10 million at the shareholders meeting in October 1907. A. Herden was hired by Metallurgiska to construct the separation plant and briquetting, which was dimensioned to for an annual export of . This was later reduced to an export capacity of . Pehrson resigned from 1 July 1908 and was replaced by Carl Lundh. To ensure all-year access to the port, the company ordered the 250-kilowatt (350 hp)
icebreaker SS
Sydvaranger, which was delivered in 1907 Most of Sydvaranger's original workforce came from
Troms and
Nordland, most of which were construction workers. Finnmark was experiencing a decline in fishing and some of the workforce came from nearby. The first
trade union, Nordens Klippe, was established on 8 September 1906. Gradually separate trade unions for each profession were established. The first
strike took place in 1908, but did not last long. Construction of the railway was given high priority to as early as possible aid in transport of workers to the mining sites. Both stations were completed in 1908, the same year as the laying of tracks started. The first
steam locomotive, built at
Hamar Jernstøperi, was delivered during the fall of 1908. For the tracks in the mine, a
shunter was needed and the company bought a
fireless locomotive. Tracks were laid through the open-pit mine, with the length varying. For instance, in 1910 there were of tracks in the mine. Construction of a
railway electrification system started in 1910; because an
overhead wire could interfere with the cranes,
third-rail conduction was chosen. Vulkan also built workshops and installed transformers. The company took delivery of a
gyratory crusher in December 1909, which was also installed by Vulkan. The main axle broke during the trials, but it was repaired in time for the opening on 1 October 1910. Sydvaranger initially applied to build a
hydroelectric power station in
Pasvikelva, but instead had to build a
thermal power station in Kirkenes. It was expanded to in 1917.
Pre-war operations The first revenue train load was transported on 13 July 1910. The first shipload of ore was sent in October 1910 with SS
Bengal. The ship sank with no survivors. The cause was probably that the forty-year-old ship had insufficient
bulkheads. The second ship, SS
Svend, sank off
Valdersund. The third vessel, SS
Aguilla, was loaded with , suffered
heeling, but was able to return to Kirkenes. Wiull was hired as director of operations in 1910, From 1911, the government required the company to establish a fund which would aid the workers should the company go bankrupt. This was introduced after several large industrial companies had collapsed in the past decade and large costs had befallen the state. Just as the first expansion was completed, Sydvaranger decided that it needed to further expand its export capacity to . Financing was secured through issuing new shares worth NOK 3 million. Investments included a new steam shovel, three steam cranes, three locomotives, a new briquetting plant; the work was completed in 1913. Henrik Lund took a study trip to the United States in 1916, where he visited more than twenty cities and brought a series of innovations with him back. By 1919 the company was still not back in production. SS
Sydvaranger and several locomotives were sold to raise capital, and the share capital was
depreciated by fifty percent to NOK 11.5 million, new shares were sold for this amount and
bonds were issued for NOK 10 million. In 1928 Sydvaranger exported and Tårnelven Kraftaksjeselskap started construction of a power station in Kobbholmvassdraget. Completed in 1930, it gave an annual production of 7.2
gigawatt-hours. The power company changed its name to Sydvaranger Kraftaksjeselskap in 1934. Sydvaranger's board initially recommended that the company be
liquidated, but reversed their opinion after discovering that the war insurance would only be paid if the facilities were reconstructed. This was later set to NOK 27.5 million. Reconstruction started in September 1945 after the
Red Army had withdrawn from Sør-Varanger. The
Directorate for Enemy Property took over ownership which was previously owned by German interests, giving the state a 43.6 percent ownership of Sydvaranger. By the end of 1945, 390 people were employed in the company. Their calculations showed an annual deficit of NOK 3.6 million, but the committee regarded it of vital importance for the local community that production be taken up. The mining company held an option to purchase a majority stake in Malmfrakt, which they executed to increase their ownership to 96 percent. The shipping company's head office was moved to Kirkenes in 1952. The icebreaker, owned by Dampskipselskapet Pasvik, had been sunk during the war, so a new icebreaker was delivered in 1947, MS
Varangis. All heavy transport during the reconstruction was done using railway, and tracks were laid throughout the mining facility. In addition, new
hopper wagons were built by Skabo. To access new areas of the mine, a tunnel was built from the deepest point of Bjørnevatnet, allowing it to be drained. Construction took four years and was completed in 1957. By 1960 Sydvaranger was the sole owner of Malmfart and issued new share capital of NOK 4.75 million to purchase a new, 7,200-tonne ship, co-owned with Fearnley og Eger's. Both
Varangmalm and
Varangberg were sold in 1960, after the former had run aground.
Good times In 1960 the company exported 904,000 tonnes worth NOK 60.8 million and generated a profit of NOK 24.7 million. By 1962 Malmfart had three vessels, of which two were
ore-bulk-oil carrier, which allowed them to transport petroleum on the return voyage to Norway. Up to 1963 the mining had taken place at the Østmalmen field, but from then production shifted to Vestmalmen. The first IT system, a
punch card machine delivered by
IBM, was introduced in 1963. A new icebreaker,
Varangis II, was delivered the following year, replacing the old icebreaker. The separate company for operating the icebreakers as liquidated in 1964. The docks were expanded several times, allowing 17,000-tonne ships from 1959, 27,000-tonne ships from 1963 and 37,000-tonne ships from 1966. Norway and the
Soviet Union came to an agreement in 1957 regarding building hydroelectric power stations along
Pasvikelva, which ran along the
Norway–Soviet Union border. Norway was permitted to build stations at Skoltefoss and Hestefoss, while the Soviet Union was allowed to build at Skoltefoss and Hestefoss, collectively known as the
Paatsjoki River Hydroelectric Plants. The agreement insured that each country was permitted to use land in the other country to build the dams. Sydvaranger created the joint venture Sameied Skogfoss Kraftverk along with
Varanger Kraftlag til build
Skogfoss Power Station. Sydvaranger's half of the investment costs were NOK 44 million. Construction started in 1962 and was completed two years later. The power station had a power output of 240 gigawatt-hours per year, half of which was at the disposal of Sydvaranger. Sydvaranger was free to sell surplus power to the grid. At the same time the mining company sold its power grid in Kirkenes to Varanger Kraftlag. Because the mining kept moving further into the mine, the crusher moved in 1971. There were many years of little precipitation in the
Lake Inari area, causing reduced power production in the Pasvik River. The company therefore decided to reopen the thermal power plant and start importing electricity from the Soviet Union. The same year a roof was built over the pellets facilities, as snow had been hindering optimal operation, and a new dock was opened for exporting the pellets. This allowed 75,000-tonne ships to dock. A new workshop at Bjørnevatn was completed in 1973 and the following year a new silo opened at Bjørnevatn, which also allowed for separating out ore with low iron content. Construction of a second pellets facility started in 1972 and was opened on 4 September 1974. This allowed the company's entire production to switch to pellets. Lindbo quit in 1976 and was replaced by Ingvald Ohm. He quit the following year and was replaced by
Robert Hermansen. A mining strike in Canada caused increased demand and part of the surplus was sold in 1978. Lay-offs were avoided, but some employees took out early retirement and there was a recruitment stop. From 1981 the company received a NOK 50-million subsidy over the state budget, which increased to the double from the next year. A used
T45 locomotive was delivered in 1984. Between 1986 and 1990, Sydvaranger halved its output of ore and reduced its workforce from 900 to 600. To help create new jobs, Sydvaranger joined with
Valmet to create Kirkenes Mekaniske Verksted. The new company was largely established with state grants and the entirety of Sydvaranger's electrical division was transferred. Sydvaranger shifted part of its production to "Superslimes" with
magnetite concentration of between 95 and 98 percent. Production reached 68,000 tonnes in 1990. Husaas retired in 1989 and was replaced by Øystein Berntsen. A new
MaK G 1203 BB locomotive was delivered in 1990, as the T45 had proved no more reliable than the G12s. Construction of a
ferrite plant started in 1991, but was delayed several times, including changing the technology and replacing the new oven which cracked. It was completed by 1994 and cost NOK 43.6 million. Sydvaranger was restructured in 1992, with the company focusing on four production divisions: ore production, Sydvaranger Service, trade with Russia, and shipping. They were act as a purchaser of services within the company, and the other divisions were designated as selling divisions, such as maintenance and service. The production division was free to purchase internally or externally, and the selling divisions were free to sell their services outside the company. At the same time a forum was established with between 15 and 20 employees to create new companies which could utilize the workforce. Only a single project materialized from this. The real estate division was sold to A/S Anlegg in 1994, and the following year the workshops were sold to Steinsvik Maskinindustri. The latter went bankrupt in 2004. By 1994 Sydvaranger had 140 employees, and by 1995 it had 25. Between 1976 and 1996, the Government of Norway subsidized Sydvaranger with about NOK 5 billion, and owned 88 percent of the company at the time of the mines shutting down. From the closing to 1999, the company paid out more than NOK 100 million in
dividend to the shareholders and was the company during that period to have the second-highest increase in share value increase on the
Oslo Stock Exchange. Negotiations were started with
Australian Bulk Minerals (ABM) for a leasing of the mine, the railway and other facilities. An agreement was signed in 1997, with the takeover date set to 31 December 1998. ABM had not secured financing by then, and new negotiations started in 1999, but the deal was laid dead in 2000. Sydvaranger also started negotiating a sale of their share of Pasvik Kraft, and originally planned to sell to
Vattenfall and
Østfold Energi, but this was stopped by Varanger Kraft. Instead, Varanger Kraft bought the state's ownership in Sydvaranger and other shares, and used their
pre-emption right to secure a 100-percent ownership of the company. Sydvaranger was delisted from Oslo Stock Exchange on 12 September 2000. That year the company had five employees and started work on transforming into an investment company with focus on eastern Finnmark.
Reopening At the time of the first closure of the mine, the
Government of Norway owned 87% of the company. In December 1999 it sold its ownership to
Varanger Kraft (who owned 63%) and the
Sør-Varanger Municipality (37%). In 1999
Arctic Bulk Minerals bought the production equipment and wanted to attempt new mining activities in the mine, but the attempt failed and the assets were returned to Sydvaranger to pay for the debt. In 2006, the company was sold to Northern Iron Ltd, and the mine was reopened in 2009. External investors invested 2,400 million
Norwegian krone (NOK) for the costs of this. In 2015, the mining company went bankrupt as a result of low iron ore prices. In April 2016 the mine and its equipment was sold for 78 million krone to the Tschudi Group. In 2016, a successful test production took place, proving the plant's operational readiness. As the main mining license was connected to the bankrupt company, an application for a new mining license was submitted in 2017. Significant geological and engineering work was completed in 2017. In 2018, Sydvaranger obtained financing for a restart from the American private equity fund Orion Mine Finance, which is one of the biggest dedicated mining funds in the world. In 2019, the final mining permit was obtained from the Norwegian government, allowing for a planned restart of full-scale operations. , the mine remains closed. ==References==