If China falls out with North Korea, then Russia will step in

27 04 2017

Pyongyang-MoscowKirsty Needham (Sydney Morning Herlad, Beijing, 24 APRIL 2017)

Chinese President Xi Jinping has told his US counterpart Donald Trump that Beijing opposes any action on the Korean Peninsula that goes against UN Security Council resolutions.

The phone call between the two leaders came as Chinese media reported on a rift between Beijing and Pyongyang, with North Korean state media criticising China as “dancing to the tune of the US”…

The US has repeatedly urged China to use its economic clout to put pressure on North Korea to abandon its nuclear program, warning that if China cannot produce a solution, the US may act alone.

Mr Xi told Mr Trump the international situation was changing rapidly and it was important the US and China maintain close contact, Chinese state media reported.

“Xi Jinping stressed that China is firmly against any behaviours that violate the UN Security Council’s resolution, at the same time it hopes all parties concerned maintain restraint, avoid doing anything intensifying the peninsula situation,” CCTV reported.

Asked about the North Korean media attack, a Chinese Foreign Ministry spokesman said: “China’s position is consistent and clear and the relevant party should be very clear about that.”

Chinese experts are saying cutting oil would be the toughest sanction China could impose – it was last done in 2003 for just three days.

North Korea’s mining industry would be severely hit if China cut energy supply to the regime.

The front page of North Korea’s Rodong Sinmun newspaper on Monday praised the DPRK’s mining industry as self-reliant, exceeding capacity and “smashing the enemies’ sanctions”.

Kim Jong-un sent congratulations to a magnesite mine – a mineral that is exempt from UN sanctions. North Korea has the world’s second largest deposits of magnesite, a raw material listed as “critical” by the US and the European Union and a key component in smartphones and aircraft. China has the world’s largest deposits.

Leonid Petrov, an ANU fellow, says China is buying other rare earth minerals that are vital for high-technology products at half price from North Korea. He says if relations between Pyongyang and Beijing continue to deteriorate, Pyongyang could cut off sales to China and find new export markets elsewhere.

“If China falls out with North Korea, then Russia will step in. North Korea allows China and Russia to compete for concessions and ports and fishing,” he said.

See the full article here…

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How the Hell does North Korea Manage to Earn Foreign Exchange?

19 04 2017

Kaesong Industrial Park - workers(Charis Chang, 2017.04.18, www.news.com.au) From the outside North Korea looks like an impoverished state cut off from the rest of the world. But during its weekend procession, the isolated regime managed to put on an impressive display of its rockets and military strength, in defiance of growing American warnings about its military capability.

While many have the impression of North Korea being a poor country that can’t feed its own people, Leonid Petrov told news.com.au that it had large stockpiles of natural resources that it used to fund its weapons research.

“North Korea is a mountainous country that has huge natural resources including deposits of high quality coal, gold, silver, uranium, iron ore and rare earth metals,” said Dr Petrov, a visiting fellow at the Australian National University College of Asia and the Pacific.

He said North Korea had exported its minerals to allies such as China and the Soviet Union for decades until the collapse of the communist bloc. Since then it had been more proactive in international trade, although the tightening of sanctions has seen its export ability curtailed recently.

Dr Petrov said China in particular had maintained trade in North Korea and was keen to keep a monopoly on its rare earth metal trade.
“So China buys everything North Korea is prepared to offer (of its rare earth metals),” he said. These metals are important because they are used the production of many 21st century products like mobile phones, computers, LCD screens and cars.

Another way that North Korea earns its money is by exporting its workers to China, Russia, the Middle East, Eastern Europe and South East Asia. In fact there were no visa requirements between North Korea and Malaysia until early this year, when tens of thousands of North Korean workers were deported following the assassination of North Korean president Kim Jong-un’s older brother Kim Jong-nam.

“Tens of thousands of North Koreans are sent overseas to work in restaurants, construction sites, as vegetable growers and builders of monuments in places like Africa,” Dr Petrov said.

“Dictatorships like big projects and North Korea can offer them labour to build big monuments, highways and airports.” Dr Petrov said the “lion’s share” of the worker’s wages went to the North Korean government.

North Korea also welcomes foreign investment. The Egyptians have invested in the country’s telecommunications network, concrete factories and construction industries, while the Chinese are keen on fishery resources, the mining industry and have developed a network of supermarkets selling Chinese-made consumerables.

Previously North Korea also benefited from co-operation with South Korea, which invested hundreds of millions into the Mt Kumgang resort where South Koreans and foreign visitors could stay and go mountain climbing. The Kaesong Industrial Park, which produced goods using South Korean know-how and North Korean labour, also gave it a financial boost until it was shut down last year following North Korea’s fourth nuclear test.

Dr Petrov said until last year China was also providing North Korea with other resources it needed such as crude oil and petroleum at “friendly prices” or possibly even for free.
It’s this type of trade that the Trump administration and the Australian government wants to block.

“They’re keen to see China stifling North Korea to death and causing the economic collapse of North Korea’s economy, which is unrealistic,” Dr Petrov said.

He said China sacrificed more than 250,000 soldiers during the Korean War to support the North Korean government. “It’s wishful thinking that China would just turn the tap off and allow the North Korean regime to implode.

“China understands that this would cause chaos in North Korea, the absorption of North Korea into South Korea and the subsequent advance of American troops to the Chinese border.

“So China is not going to allow the economic collapse of North Korea.” Dr Petrov said China was more likely to demonstrate its anger through ceasing economic co-operation temporarily, such as when it suspended the importation of coal after the assassination of Kim Jong-nam. “It bites but is not deadly,” he said.

But Dr Petrov said these types of actions were probably not going to be effective in curbing North Korea’s ambitions as it could always turn to Russia to help. “If China ceases economic co-operation, then Russia steps in and will continue doing the same,” he said.

“North Korea knows that well and plays off Russia against China, allowing Moscow and Beijing to compete for concessions on North Korea’s mining industry, fisheries and port facilities.” Russia is interested in North Korea because it sees it as a good market for Russian gas, oil and electricity. Russia believes North Korea could also potentially open the corridor for the export of energy to South Korea.

It sees North Korea as part of a potential transport corridor stretching from South Korea to Europe, via Russia’s Trans-Siberian Railway. “Russia is not interested in the collapse of North Korea but the stability and co-operation with North Korea,” Dr Petrov said.

Even other countries have had a hard time enforcing sanctions against North Korea.
A United Nations expert team released a report last month that found North Korea had managed to avoid sanctions by using Chinese front companies and other foreign entities to disguise where its goods were coming from. Last year it managed to continue its export of banned minerals and also has access to international banking.

Part of the problem is how different countries interpret what is banned by the sanctions.
One example was highlighted after Austrian ski equipment was found at the luxury Masik ski resort in North Korea. Austria later said it didn’t think ski lifts were included in the European Union’s definition of luxury goods prohibited from being sold to North Korea.

An Australian brand of ski clothing was even manufactured at the Taedonggang Clothing Factory in Pyongsong from 2014, but the company said it was not aware of the problem until after production had been completed and shipped to retail customers. It took two years for the company to sever its production line.

When asked how the conflict with North Korea could be resolved, Dr Petrov said: “Stop the war, end the conflict, reconcile and co-operate”. Dr Petrov believes that North Korea had a chance for survival if it could resume co-operation with South Korea, and this could happen if South Korea changed leadership at its May 9 presidential election.

He said co-operation did happen during the 10 years of the Sunshine policy that encouraged interaction and economic assistance between the two countries from 1998 to 2008, but the US actions were very important.
He said North Korea initially froze its nuclear program according to an agreement made when Bill Clinton was president but his successor George Bush scrapped this, which forced North Korea to resume its program.

See the full article here… 





Brisbane-based geologist Louis Schurmann linked to huge North Korea rare earths mining project

7 11 2014

Louis Schurmann(By Mark Willacy, ABC, 6 Aug 2014) A leading Asian human rights activist has urged the Federal Government to investigate a Queensland-based resources company and a prominent Australian geologist over mining deals with North Korea that he believes may breach United Nations sanctions.

One of the deals involves the mining of a potential deposit of 216 million tonnes of rare earths, which are minerals used in everyday items including smartphones, flatscreen televisions and computers, but also essential for sophisticated weapons such as guided missiles.

The deposit, discovered at Jongju, about 150 kilometres north-west of the North Korean capital Pyongyang, is reportedly one of the world’s largest.

It could also provide a significant boost to the rogue state’s economy.

Late last year, a British Virgin Islands-based private equity firm, SRE Minerals, signed a joint venture with the regime-run Korea Natural Resources Trading Corporation to develop the site for the next 25 years.

The project’s lead scientist and director of operators is Dr Louis Schurmann, an experienced Brisbane-based geologist and fellow of the Australasian Institute of Mining and Metallurgy.

Tokyo-based Human Rights in Asia director Ken Kato has told the ABC that he wants the joint venture project investigated.

“Rare earths are an indispensable material for guided missiles,” he said.

“North Korea’s mining resources are a major source of revenue for its nuclear and missile programs.”

Activist who questioned deal labelled ‘doomsday prophet’ in email

UN Security Council resolution 2094, passed in response to the regime’s 2013 nuclear weapons test, bans the transfer of any financial or other assets, or resources “that could contribute to the DPRK’s [North Korea’s] nuclear or ballistic missile programs”.

The question remains whether this could in any way apply to rare earths mined in North Korea.

The ABC has obtained correspondence between Mr Kato and Dr Schurmann, in which the activist warns the geologist that the project could be in violation of resolution 2094.

The exploration geologist dismissed the concerns in a reply email.

“Have you ever thought that doomsday prophets like your [sic] cause most of the problems?? What we are doing is making a difference … a POSITIVE one … try it,” Dr Schurmann wrote.

Mr Kato has referred Dr Schurmann to the Sanctions Section of Australia’s Department of Foreign Affairs and Trade, urging an investigation.

The Sanctions Section replied: “Australia takes its sanctions obligations … very seriously and we will provide due consideration to the matters you have raised.”

When Lateline asked the department whether Australians or Australian companies involved in the Jongju mining project were in breach of sanctions, it refused to comment, or to confirm if an investigation was underway.

Rare earths could ‘change the whole game’ for North Korea

North Korea expert Leonid Petrov, from the Australian National University, warned that if the rare earths deposit was as big as being touted, it would provide a huge boost to the country’s economy.

Dr Petrov said such an injection of hard currency into the impoverished and brutal regime would strengthen its chances of survival.

“If they really do have substantial amounts of rare earths in North Korea it can actually change the whole game of survival for North Korea,” he said.

“The regime does not need to reform [with such an injection].”

Mr Schurmann is not the only Australian link to the Jongju rare earths project.

Brisbane-based Salva Resources assessed the deposit for the proponents, and found it to be a considerable and economically viable prospect.

At the time of the company’s involvement, Salva Resources was owned by Brisbane mining executives Lachlan Broadfoot and Grant Moyle.

Last year, in a deal that media reports said had netted them millions of dollars, they sold the company to US engineering group HDR.

Lateline contacted the new company, HDR Salva, seeking comment about the Jongju assessment and an interview with Mr Broadfoot, who works at the merged company.

In a statement, HDR Salva said: “Salva Resources was contracted to do a geological review of historical data. The nature of this work was thus not relevant to your other comments.”

Those “other comments” relate to the ABC’s queries about UN sanctions against North Korea.

Under Security Council Resolution 1718, to which Australia is bound, it is “an offence to engage in conduct which assists, or results in, the sale, supply or transfer of specified goods on the luxury goods list to [North Korea]”.

Number 22 on the prohibited list is “precious metals”, an appellation sometimes given to rare earths.

It is unclear whether resolution 1718 applies to materials mined inside North Korea.

Gold and silver also appear on the list.

Lateline has discovered that Dr Schurmann’s mining interests in North Korea are not just confined to rare earth minerals.

Dr Schurmann is a director of Australian Stock Exchange-listed EHG Corporation, which last year announced it had acquired a sub-licence “to mine, process, extract and sell all minerals from the North Hwanghae province” in the closed communist state.

Those minerals would include gold, silver, lead and copper.

Dealing with North Korea ‘controversial business’

ANU’s Dr Petrov said dealing with North Korea was fraught with dangers.

“The money that goes to North Korea can be used by the regime to suppress its own people or to beef up its nuclear or missile capabilities. So doing business with North Korea is controversial business.

“It’s highly advised if you don’t want to end up on the list of sanctioned people and banned from doing business with other countries, you’d better check the list and check what is prohibited and what it allowed.”

Lateline emailed Dr Schurmann, sent him a Facebook message, called his home phone number, and visited his Brisbane home seeking comment. The program finally made contact. But the geologist told the ABC he has been advised by his lawyers not to comment at this stage.

As well as potential sanctions breaches, questions remain about who Dr Schurmann and his colleagues are dealing with in Pyongyang.

Human rights activist Mr Kato said most of Pyongyang’s biggest money making ventures were run by a secret unit of the regime called “Office 39”.

Mr Kato has told the ABC that while Office 39’s agents were sometimes involved in legitimate ventures, they were also responsible for counterfeiting, drug smuggling and weapons trafficking, he said.

“Office 39 controls most of the mining in North Korea. It’s like a big exclusive conglomerate for the Kim family,” said Mr Kato.

“The US Treasury Department says Office 39 provides capital to North Korea’s leaders and it is subject to sanctions in Australia, the US, and Europe.”

Do you know more? Email: investigations@abc.net.au





Rare earths bankroll North Korea’s future

7 08 2012

Image(By Leonid Petrov, Asia Times On-line, 7 August, 2012)

Those who travel to North Korea regularly might have noticed that the last couple of years have brought significant improvement in the country’s economic situation. Newly built high-rise apartments, modern cars on the roads and improved infrastructure come as a surprise to visitors. It begs the question, where does Pyongyang get the money from?

The ambitious rocket and nuclear programs, which North Korea continues to pursue despite international condemnation, are expensive and harmful to its economy. International sanctions continue to bite the Democratic People’s Republic of Korea’s foreign trade and investment prospects. Regular floods and droughts, animal epidemics and other natural disasters hit the fragile economy even harder.

According to expert estimations, the DPRK should have ceased to exist in the mid-1990s, after the Communist Bloc collapsed and Kim Il-Sung died. But North Korea has fully recovered after the famine and even shows steady signs of economic growth.

Foreign critics looked everywhere with hope to unravel the mystery. After 2008, the stalled inter-Korean cooperation left North Korea without South Korean financial assistance. Western humanitarian aid has also been exhausted or reduced to a number of goods with little market value. Although the volume of North Korea’s foreign trade is negligible, the domestic economic situation continues to improve. Pyongyang is routinely suspected of violating international sanctions by trading arms, smuggling drugs, counterfeiting US dollars and other crimes.

These activities would be expected to refill the impoverished state with badly needed foreign exchange. However, anti-proliferation operations and bank account arrests have never disclosed anything criminal nor did they manage to answer the main question: where does the money come from?

In fact, North Korea is sitting on the goldmine. The northern side of the Korean peninsula is well known for its rocky terrain, with 85% of the country composed of mountains. It hosts sizeable deposits of more than 200 different minerals, of which deposits of coal, iron ore, magnesite, gold ore, zinc ore, copper ore, limestone, molybdenum, and graphite are the largest and have the potential for the development of large-scale mines.

After China, North Korea’s magnesite reserves are the second-largest in the world, and its tungsten deposits are almost the world’s sixth-largest. Still the value of all these resources pales in comparison to prospects that promise the exploration and export of rare earth metals.

Rare earth metals are a group of 17 elements found in the earth’s crust. They are essential in the manufacture of high-tech products and in green technologies, such as wind turbines, solar panels or hybrid cars.

Known as “the vitamins of high-tech industries,” REMs are minerals necessary for making everything that we use on a daily basis, such as smartphones, flat-screen TVs, and notebook computers. Some rare earth metals, such as cerium and neodymium, are crucial elements in semiconductors, cars, computers and other advanced technological areas. Other types of REMs can be used to build tanks and airplanes, missiles and lasers.

South Korea estimates the total value of the North’s mineral deposits at more than US$6 trillion. Not surprisingly, despite high political and security tensions, Seoul is showing a growing interest in developing REMs together with Pyongyang.

In 2011, after receiving permission from the Ministry of Unification, officials from the Korea Resources Corp visited North Korea twice to study the condition of a graphite mine. Together with their counterparts from the DPRK’s National Economic Cooperation Federation they had working-level talks at the Kaesong Industrial Complex on jointly digging up REMs in North Korea. An analysis of samples obtained in North Korea showed that the type of rare earth metals could be useful in the manufacture of liquid crystal display (LCD) panels and optical lenses.

The joint report also revealed that there are large deposits of high-grade REMs in the western and eastern parts of North Korea, where prospecting work and mining have already begun. It also reported that a number of the rare earth elements are being studied in scientific institutes, while some of the research findings have already been introduced in economic sectors. The North built a REM reprocessing plant in Hamhung in the 1990s but has been unable to put the plant into full operation due to power and supply bottlenecks.

Rare earth minerals are becoming increasingly expensive, as China, the world’s largest rare earth supplier, puts limits on its output and exports. In February, China’s exports of rare earth metals exceeded the price of $1 million per ton, a nearly 900% increase in prices from the preceding year.

China, which controls more than 95% of global production of rare earth metals, has an estimated 55 million tons in REM deposits. North Korea has up to 20 million tons of REM deposits but does not have the technology to explore its reserves or to produce goods for the high-tech industry. Nevertheless, in 2009 the DPRK’s exports of rare metals to China stood at $16 million, and as long as someone invests, exports will continue to expand.

This growing rise in REM prices and strong demand gives the young leader Kim Jong-Un a good chance to improve the economic standing of North Korea without actually reforming its economy.

Following the Gulf States’ and Russian example of catching the wind of rising oil prices in their sails, Pyongyang is likely to follow suit, becoming rich and powerful through the exploration and sale of natural resources. The export of rare earth metals will replenish the state coffers; stimulate the loyalty of the elites to Kim Jong-Un’s autocratic rule; and secure the growth of consumption among the ordinary people.

Relations with South Korea, China and Japan are also likely to improve due to the large scale cooperation on exploring, processing and utilizing REMs – the mineral of the 21st century.

Pyongyang needs international assistance through joint projects to explore its mineral resources, and mainly its rare metal and rare earth minerals. North Korean and Chinese teams have been cooperating to explore mineral resources in the DPRK for many decades. Seoul has recently expressed interest in working with Pyongyang on mining projects and technological innovations.

Perhaps, Japan and Taiwan, which look for alternative REM supplies for their micro-processor and other cutting edge industries, might also decide to contribute to the development of this economically promising venture.

Paradoxically, the promise of Kim Jong-Il might soon come true and North Korea may become a “rich and powerful state” – rich in natural resources and empowered by nuclear technologies. In that case, North Korea might not even need to go through a painful and potentially destabilizing economic reform.

Although the political regime will remain dictatorial, the idea of unification with the South by war or absorption will soon become meaningless. The purges of political elites and the mass starving of ordinary people in North Korea will cease. Gradually the level of prosperity in the two halves of the divided Korea will start equalizing, opening more opportunities for greater exchange and cooperation.

Read this article in Korean here… 북한의 숨겨진 비장의 카드…

Largest Known Rare Earth Mineral Deposit Discovered

(Mining Weekly.Com 4 December 2013) SRE Minerals Limited announces the results of exploration and studies in collaboration with the Korea Natural Resources Trading Corporation of the Democratic People’s Republic of Korea

SRE Minerals Limited (“SRE” or “the company”) announced today their joint venture agreement with the Korea Natural Resources Trading Corporation for rights to develop all rare-earth-element deposits at Jongju, North Pyongan Province.

The joint venture company known as Pacific Century Rare Earth Mineral Limited has the rights under the joint venture agreement which includes the exploration, mining, beneficiation and marketing of all REE deposits in the Jongju area for the next 25 years with a further renewal period of 25 years.

Under the terms of the JV agreement SRE has also been granted permission for a National Rare Earth Mineral Processing Plant on site at Jongju, which is situated approximately 150 km north-northwest of the capital city of Pyongyang, within the North Pyongan Province, Democratic People’s Republic of Korea.

Leading Australian mining and geological consultancy, HDR Salva Resources Pty Ltd, has been SRE’s technical representative for the project and has been commissioned to access the mineralised potential of the Jongju REE target* with special reference to detailed mapping, extensive trenching and limited drilling.

HDR Salva Resources (Pty) Ltd.’s initial assessment of the Jongju REE Exploration Target* indicates a total mineralisation potential of 6.0 Bt (216.2 Mt total rare-earth-oxides including light rare-earth- elements such as lanthanum, cerium and praseodymium (mainly britholite and associated rare earth minerals). Approximately 2.66% of the 216.2 Mt TREO consists of heavy rare-earth-elements. A detailed classification of mineralised potential present in the Jongju REE Target* is presumed to be:

• 664.8 Mt @ >10.00% TREO,
• 1.1 Bt @ 4.72% TREO,
• 579.4 Mt @ 3.97% TREO, and
• 3.63 Bt @ 1.35% TREO.

Dr Louis Schurmann said: “The Jongju Target* would appear to be the World’s largest known REE occurrence.”

Technical information in this announcement has been compiled by Dr Louis W. Schurmann, who is a Fellow of the Australasian Institute of Mining and Metallurgy and a Professional Natural Scientist with over 18 years of experience relevant to the styles and types of rare earth mineral deposits under consideration, and to the activities which has been undertaken to qualify as a Competent Person as defined by the Australasian Code for Reporting of Minerals Resources and Reserves (JORC) 2004. Dr Schurmann consents to the inclusion of information in this publication.

Further exploration is planned to recommence in March 2014, which will include 96,000m (Phase 1) and 120,000m (Phase 2) of core drilling. Results from the exploration program will be reported according to the Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Mineral Council of Australia (JORC Code (2004 / 2012)).

Investigations by the DPRK’s Academy of Science geologists have also identified several HREE targets*. There are also seven newly discovered carbonatite complexes which have been identified as green-field exploration targets. Exploration programs have been planned to assess their potential in 2014, together with the evaluation of known bastnasite and monazite deposits.

According to the mentioned HDR Salva Resources’ assessment, the Jongju REE Target* also contains economical quantities of rare and critical metals associated with fluorite, apatite, zircon, magnetite, ilmenite, nepheline and feldspar. These commodities will also be addressed during future exploration and further studies.
“This joint venture agreement reinforces the strong and constructive relationship SRE has developed with the DPRK over that time,” he said.

“The REE resource potential of the DPRK, while estimated to be massive has only been lightly explored to date. Given the major economic significance of the effective utilisation of these important minerals to the DPRK, we look forward to working in close co-operation with our partner to progress the development of this excellent opportunity.”

In terms of back ground, the majority of rare earth elements were sourced from placer deposits in India and Brazil in 1948. During the 1950’s, supply came mainly from South Africa, mined from large veins of rare earth-bearing monazite. Then from the 1960’s to 1980’s, rare earths were supplied primarily from the U.S., predominantly from Mountain Pass in California. Competition from China and environmental concerns eventually saw the U.S. operations shut down, and for the last 15 years China has dominated global supply. China today supplies an estimated 90-95% of the global market.

China has recently set quotas to restrict its rare earth exports, and global suppliers have made considerable headway in reducing dependence on Chinese supply. Based on this, several major rare earth companies have been taking advantage of this situation while many junior exploration companies have embarked on exploration programs to add value to small and relatively low-grade REE occurrences.

References to Exploration Target(s)* or Target(s)* in this document are in accordance with the guidelines of the JORC Code (2004). As such it is important to note that in relation to reported Exploration Targets or Target any reference to quality and quantity are conceptual in nature. Exploration carried out to date is insufficient to be able to estimate and report rare-earth mineral resources in accordance with the JORC Code (2004). It is uncertain if further exploration will result in the determination of a rare earth mineral Resource.

Further information will be available at www.pcreml.com and www.sreminerals.com

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N. Korea’s Mineral Exports to China Tripled from Last Year

3 12 2011

 (Seoul, Yonhap, 2011/11/06)  A joint study of Chinese data by Yonhap News Agency and Seoul-based IBK Economic Research Institute showed that China imported 8.42 million tons of minerals from North Korea from January to September this year, worth US$852 million.

Over the first nine months of last year, China brought in 3.04 million tons of minerals from the North for $245 million. Most of the minerals were anthracite coals, the data showed. This year, of 8.42 million tons, 8.19 tons were anthracites. China is the sole major ally and the biggest economic benefactor for North Korea, a reclusive regime under international economic sanctions following its nuclear and long-range missile tests.

Cho Bong-hyun, an analyst at the IBK institute, said North Korea may be trying to earn much-needed hard currency as it aims to become a powerful and prosperous country by 2012. “Last year, North Korea ordered its institutions to meet their goals in foreign currency income by this year,” Cho said. “Since exporting minerals is a military business, we can see that the military is trying to meet its target. In addition, the steep mineral export growth was attributable to the lifting of the cap on the amount of mineral exports, as ordered by North Korean leader Kim Jong-il.”

China appears to be trying to stockpile mineral resources at affordable prices, Cho added. North Korean anthracites were traded at an average of $101 per ton, whereas the international standard for quality anthracites is $200 per ton. “Given that North Korean coals are of very good quality, trade with China must have been made at a fairly low price,” Cho said.

Meanwhile, sources said North Korean authorities last month entirely halted its coal exports, as the impoverished country fears a shortage of energy resources during the upcoming winter. From January to September this year, China exported 732,000 tons of minerals to North Korea, most of them crude oil.

North Korea’s closed economy contracted for a second year in a row

 (By Jeremy Laurence, Reuters, Nov 3, 2011) – North Korea’s closed economy contracted for a second year in a row last year due to international sanctions, sluggish agricultural production and a slowdown in manufacturing, South Korea’s central bank said on Thursday.

In a report issued by the Bank of Korea (BOK), the North’s centrally-planned economy was estimated to have shrunk 0.5 percent year-on-year in 2010 compared with a 0.9 percent contraction in 2009.

“Last year, the North Korean economy contracted as economic conditions at home and abroad worsened amid energy shortages and international sanctions and its manufacturing sector remained sluggish,” said BOK official Park Yung-hwan.

Seoul’s assessment of its neighbor’s economy does not auger well for the North’s ambitious drive to become a “strong and prosperous nation” by 2012 when it celebrates the 100th anniversary of the birth of the state’s founder Kim Il-sung.

The North currently ranks as one of the world’s poorest and least developed states. It does not release economic data, and the South calculates the figures through specialist institutes which monitor the North’s economy.

The BOK report said North Korea’s nominal gross national income (GNI) amounted to 30 trillion won (US$26.5 billion) last year, which is only 2.56 percent of South Korea’s GNI of 1,173 trillion won. Meanwhile, inter-Korean trade grew 13.9 percent year-on-year to $1.91 billion, the BOK said…

AGRICULTURE, MANUFACTURE DECLINE

…The North’s moribund economy has also been affected by poor agriculture production, as a result of summer flooding and a particularly harsh winter. The BOK said its agricultural and fishery industry contracted 2.1 percent last year from a year earlier, and its manufacturing sector declined 0.3 percent in 2010, the BOK said.

The North has suffered chronic food shortages for about two decades due to mismanagement, isolation and natural disasters, making it dependent on foreign donors to fill the food gap. Aid agencies say the food situation has worsened this year as foreign aid deliveries have slowed.

Seoul and Washington, which had been the North’s biggest food donors until a few years ago, have suspended food aid to the North over monitoring concerns. South Korea has also said it will only resume aid when the North denuclearizes. The United States sent a team to the North earlier this year to assess the food situation, but has said it is still undecided on resuming aid.

Pyongyang has reached out for help this year, saying it wants to rejoin regional aid-for-denuclearization talks. The North quit the talks more than two years ago…