North Korea's $6 Trillion Secret
Posted by Adam English - Tuesday, August 14th, 2012
http://www.wealthwire.com/news/global/3673?r=1
South Korean news sources are
reporting that North Korea is sitting on 20 million tons of rare earth
metal ores in its harsh, mountainous interior.
If the estimate from South Korean state-owned mining company Korea Resources is accurate, North Korea is sitting on $6 trillion dollars worth of deposits and has the second largest rare earth supply in the world.
The impoverished
country will even be able to refine the ore as it comes out of the
ground. A rare earth mineral processing plant was built in the 1990s but
has not been in full production due to supply disruptions and
inconsistent power.
In
addition to the large stash of essential minerals for modern
electronics, the country has significant undeveloped reserves of coal,
gold, tungsten, iron, copper and molybdenum.
As it tries to raise cash and support the
recent change in leaders following the death of Kim Jong Il, North
Korea will undoubtedly look to the only country it calls an ally –
China.
It just so happens that China recently
announced plans to help major firms invest in North Korea. Chinese Vice
Commerce Minister Chen Jian wrote in a statement,
"We will support big Chinese
companies who are willing to invest in North Korea to broaden the
economic and trade cooperation with North Korea, to push the two sides
to upgrade two-way trade and investment structures and study the
feasibility of cooperation on big projects."
About 40% of the 138 Chinese companies that worked in North Korea
were extracting minerals in 2010, according to the U.S. Korea Institute
at Johns Hopkins University.
Considering China accounts for 90% of the rare earth minerals that
are mined worldwide, North Korea couldn't pick a better partner for
development.
China signals strong support for decaying North Korea economy
1 of 1Full Size
By Xiaoyi Shao and Nick Edwards
BEIJING (Reuters) - China on
Tuesday promised to help major firms invest in impoverished neighbour
North Korea, signalling strong support for the North's untried young
leader just as he is believed to be planning reforms to his country's
broken economy.
Vice Commerce Minister Chen Jian, writing in Communist Party
mouthpiece the People's Daily, said priority would be given to two
economic zones China and North Korea set up just over a year ago and
which would represent a rare major foray by isolated Pyongyang into
international commerce.
The comments coincide with this week's trip to China by Jang
Song-thaek, the powerful uncle of young dictator Kim Jong-un and seen as
likely to be a driving force for reforms.
"We will support big Chinese companies who are willing to invest
in North Korea to broaden the economic and trade cooperation with North
Korea, to push the two sides to upgrade two-way trade and investment
structures and study the feasibility of cooperation on big projects,"
Chen wrote.
In a statement issued after a meeting between Chinese Commerce
Minister Chen Deming and Jang, the ministry said the joint economic
zones had "entered a substantive development phase".
Their development has "important meaning for further
consolidating and developing traditional friendly relations and ... for
promoting regional peace and prosperity", it added.
North Korea's official media said Jang had gone to China to discuss commercial projects between the two countries.
The trip is seen as the latest sign that Kim is looking seriously
at ways to revive his reclusive country's decaying economy which has
been in decline for years and is unable even in years of good harvests
to feed its 24 million people.
North Korea already relies heavily on China to support its
economy, dragged down by decades of mismanagement and international
sanctions over its weapons programmes.
China, for its part, lives in terror of a political or economic
collapse in North Korea which could send a wave of refugees into its
poor northeast.
"Only North Korea's economic opening up can truly ensure peace
and stability on the Korean peninsula," said Wei Zhijiang, an expert on
the two Koreas at Zhongshan University in southern China.
"China wants to play an important constructive role in North
Korea's economic opening up and integration into the international
community," he added.
Kim's father, who died last December, flirted with reform but
never really let it take root, wary of anything that might undermine his
family's iron grip over the state.
But the new leader has presented a very different image to his
father and is believed to want economic and agricultural reform. Jang
has long advocated such reforms.
In another sign that Kim may be looking to end international
isolation, he has sent the country's nominal head of state Kim Yong-nam
this month to Vietnam and Laos, where he was reported to have discussed
economic development.
In another tentative sign that Pyongyang is opening up, officials
from Japan and North Korea will meet for the first time in four years
in Beijing on August 29, Japan's top government spokesman said. They
will discuss the retrieval of the remains of Japanese who died on the
Korean peninsula during World War II and possibly discuss North Korea's
abductions of Japanese citizens.
Vice Minister Chen said there were good opportunities to develop
ties between the two nations - Beijing is Pyongyang's only major ally -
and to expand fast-growing bilateral trade, which he said was up 24.7
percent in the first half of 2012 on a year earlier, worth some $3.1
billion.
Total trade between the two countries was $5.7 billion in 2011,
up 62.4 percent, Chen cited data from China's Customs Administration as
saying.
ECONOMIC ZONES
Chen said the first priority was to "actively and steadily push
forward the development and cooperation of two economic zones" that the
two had established in June 2011.
The zones are in Rason on the North's east coast, and in
Hwanggumphyong, an area on the border between the two countries that is
yet to be developed.
"Governments should bring existing economic and trade mechanisms
into play appropriately and push forward and improve the two-way trade
and investment environment," Chen said.
He called for expanding and deepening the cooperation between
North Korea and China's north eastern Liaoning and Jilin provinces which
border the country, and to strengthen cooperation on building
infrastructure.
The two countries have planned to develop a new industrial
district on the Yalu River that runs along their border, but the
construction of a bridge that will be part of the project has been
suspended because of disagreements on how to proceed.
(Additional reporting by Ben Blanchard, Chris Buckley and Sui-Lee
Wee in Beijing, Stanley White in Tokyo and Jack Kim and David Chance in
Seoul, Editing by Jonathan Thatcher)
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