According to newspaper Dagens Næringsliv, the subcontractor Pon Equipment, which delivers mining equipment to Sydvaranger, has rejected any further deliveries. Sydvaranger has sued Pon claiming that the deliveries should be resumed immediately, arguing that the stop can bring the company to bankruptcy within a few days, NRK reports citing NTB.
Prices on iron ore has been plummeting for quite a while now, putting Sydvaranger Gruve and owner Northern Iron in a difficult situation. The Northern Iron has not made net profits since it started up mining in Arctic Norway in 2009, and deficits have been steadily growing. In November 2014 all employees agreed to reduced salaries for the next six months in an attempt to uphold and secure the activity, and earlier this month, the company discharged all employees not living in the region working on so-called offshore rotations.
According to the court ruling, Pon believes that Sydvaranger can buy spare parts from other companies, while Sydvaranger on the other hand claims that Pon is in a monopoly situation.
Director of Pon Mining Michael Krsitensson says that his company had a contract with Sydvaranger for many years, but that Sydvaranger has terminated the contract. “We want the court to decide if we are forced to deliver spare parts despite the opposite party breaking the contract,” Kristensson says according to NTB.