Norway blocks sale of last private land on Svalbard after Chinese interest

The Norwegian government has called off a plan to sell the last privately owned piece of land on the Arctic archipelago of Svalbard in order to prevent its acquisition by China.

The remote Sore Fagerfjord property in south-west Svalbard – 60 sq miles (sq km) of mountains, plains and a glacier – was on sale for €300m (£277m).

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.

A treaty signed in 1920 recognises Norwegian sovereignty over the territory but 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 coalmining community on Svalbard for decades via the state-run company Trust Arktikugol.

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

“The current owners of Sore Fagerfjord … are open to selling to actors that could challenge Norwegian legislation in Svalbard,” said the trade and industry minister, Cecilie Myrseth. “It could disturb stability in the region and potentially threaten Norwegian interests.”

Per Kyllingstad, a lawyer who represents the sellers, previously said he had received “concrete signs of interest” from Chinese potential buyers who had “been showing a real interest in the Arctic and Svalbard for a long time”.

He said the sale was 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”.

Kyllingstad did not immediately respond to the government announcement.

Critics are sceptical about the price and feasibility of the sale. The property, in the south-west 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 €33.5m to acquire the second-last piece of private land on Svalbard, near Longyearbyen, which was also reportedly being eyed by Chinese investors.