Archive for the ‘Energy’ Category

DPRK -china trade dips slightly in H1 2014

Monday, August 4th, 2014

According to the Institute for Far Eastern Studies (IFES):

Grain Imports Decrease, Rare-Earth Mineral Exports Increase in the First Half of 2014

It has been reported that Chinese grain imports in North Korea have fallen drastically in the first half of 2014. According to the Korean Foreign Trade Association (KFTA), Chinese exports of grain to North Korea totaled 58,387 tons in the first half of 2014, totaling a mere 47 percent of the grain exported in the first half of the previous year (124,228 tons).

China’s most heavily exported grain product to North Korea is flour, which made up 68.8 percent (40,142 tons) of all total grain exports for the first half of 2014. China also exported 13,831 tons of rice and 3,420 tons of corn to North Korea. Corn exports did not even reach twenty percent of the amount exported at the same time last year (17,655 tons).

It is postulated that China’s sharp decrease in grain exports to North Korea is due to the souring relations between the two nations in 2014. Another theory is that the decrease in exports could be due to North Korea’s recent increase in agricultural productivity over previous years.

In the first half of 2014 China exported 109,531 tons of fertilizer to North Korea, 21.3 percent less than the amount exported during the same timeframe last year (139,161 tons). In the first three months of 2014, North Korea aggressively imported Chinese fertilizer at a rate of twenty thousand tons over its monthly average. However, this decreased markedly in the months of April, May and June.

Meanwhile, North Korea has been exporting large quantities of rare-earth resources (which are used in manufacturing high-tech products) to China over the last few months. Reportedly, in May of 2014, North Korea exported 550,000 dollars’ worth of rare-earth ore to China. This figure more than doubled the following month, reaching 1.33 million USD in June.

This comes as a bit of a surprise, as North Korean rare-earth resource exports to China had come to a standstill after the first round of exports (totaling 24.7 thousand USD) in January 2013. Suddenly, after fifteen months, North Korea has exported 1.88 million USD worth of rare-earth ore (approx. 1.93 billion KRW, 62.66 thousand kilograms) over the last two months.

Since 2011, North Korea has in fact been exporting rare-earth carbonate mixtures to China; however total exports of these products have only reached 170 thousand USD over the last three and a half years.

North Korea has been placing attention on these underground rare-earth resources, of which the nation reportedly has ample quantities of in various deposits around the country. Recently, much effort has been put into surveying for deposits of these so-called “vitamins of the 21st century’s high-tech industry.” In 2013 a company for the development of rare-earth materials in North Pyongan Province was established with the cooperation of the international private equity firm “SRE Minerals.”

In July 2011, the Choson Sinbo, a news affiliate of the General Association of Korean Residents in Japan, reported in an interview with top executives from the National Resources Development Council that rare-earth resource deposits in North Korea total approximately 20 million tons. The drastic increase seen in rare-earth resource exports can be attributed to North Korea’s attempt to diversify its resource exports. In other words, the DPRK is investing in rare-earth material exports in order to reduce its dependency on other leading mineral exports such as anthracite, iron ore, and lead.

Exports of anthracite to China decreased by 23 percent in the first half of 2014 (compared to last year), totaling approximately 571 million USD. Iron ore exports, North Korea’s second leading resource export, reached approximately 121 million USD in the same time period – a drop of 5 percent when compared to the same time period last year.

According to the Korea Herald (Yonhap):

North Korea’s trade with its economic lifeline China fell 2.1 percent on year to US$2.89 billion in the first six months of this year, data compiled by South Korea’s government trade agency showed Monday, in another sign that strained political ties between the two nations have affected their economic relations.

During the six-month period, North Korea’s exports to China declined 3.9 percent to $1.31 billion and imports slipped 0.6 percent to $1.58 billion, according to the data provided by the Beijing unit of South’s Korea Trade and Investment Promotion Agency (KOTRA).

There were no shipments of crude oil from China to North Korea from January to June, the data showed.

“Despite the six-month absence of oil shipments, the scale of North Korea’s decline in imports is minimal,” the source said on condition of anonymity.

Meanwhile, North Korea’s exports of rare earth to China jumped 153.7 percent on year during the January-June period, the data showed, without providing the value of the exports.

Read the full story here:
N. Korea’s trade with China falls 2.1 pct in H1
Korea Herald (Yonhap)
2014-08-04

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DPRK increases exports of rare earths to China

Sunday, July 27th, 2014

According to the Korea Times:

North Korea has increased its rare earth exports to China amid worries within the international community that its mineral exports could weaken the effect of sanctions imposed on the reclusive state.

The cash-strapped communist country exported goods to the value of $550,000 and $1.33 million in May and June, respectively, according to the Korea International Trade Association (KITA).

Last January, the North exported elements worth nearly $25,000 to China for the first time and continued them this year. The country has an estimated 20 million tons of rare earth elements.

The North’s resources exploitation have stirred speculation that the impoverished state may further diversify mineral exports to China, where it has previously mostly exported anthracitic and iron ore.

The KITA report identified the changing trend in North Korea’s earnings from mineral exports.

In the first half of this year, earnings from anthracitic and iron ore exports decreased 23 percent and 5 percent, respectively.

These earning deficits were compensated for by exports of rare earth elements. There has been a sharp increase in global demand over the last recent decade because several high-tech devices, including smartphones, and other high technology devices use them in core components. Rare earth elements are a group of 17 elements on the periodic table referred to by the US Department of Energy as “technology metals” because of their use and application.

The communist country relies heavily on mineral exports as a major source of hard currency after international sanctions were imposed on the Pyongyang regime for its continuing missile launches and testing of nuclear weapons.

Natural resources account for 73 percent of North Korea’s bilateral trade with China in 2012. The North exports 11 million tons of anthracitic to China annually.

Yonhap coverage:

North Korea exported rare-earth elements worth $1.87 million to China from May to June, resuming outbound shipments of the crucial industrial minerals to its key ally and economic benefactor in 15 months, data showed Sunday.

North Korea shipped rare-earth minerals worth $550,000 and $1.32 million to China in May and June, respectively, which amounted to a total of 62,662 kilograms, according to the Korea International Trade Association based in Seoul.

The communist regime first exported rare-earth metals worth $24,700 to China in January 2013 and had stopped selling them until recently.

Separately, Pyongyang has sold carbonate-containing rare-earth compounds to China since 2011, but the size of outbound shipments is small, with the total amount is estimated at about $170,000 over a period of three and a half years.

The impoverished nation is known to have large reserves of rare-earth minerals, which are crucial ingredients used in many tech products as well as the military and medical sectors.

The latest move comes as the North has stepped up developing rare-earth deposits to support its moribund economy.

Last year, the North’s state-owned Korea Natural Resources Trading Corporation signed a 25-year deal with British Islands-based private equity firm SRE Minerals Limited to mine deposits in Jongju, northwest of the capital, Pyongyang.

Experts said the recent surge in North Korea’s rare-earth shipments may be part of its attempts to diversify sources of mineral exports, which account about half of its total exports.

The North’s export of anthracite coal fell 23 percent in the first half of this year to $571.2 million from a year ago, while ironstone declined 5 percent to $120 million in the cited period, according to trade data.

“The rare-earth minerals sold to China were valued at $30 per kilogram, and they were considered to be processed iron concentrates or oxidized substances,” said Choi Kyung-soo, chief of the Seoul-based North Korea Resource Institute. “It could be seen as an attempt to diversify items of mineral resource exports, but it remains to be seen whether the North will start exporting large volumes of rare-earth minerals.”

Read the full stories here:
Rare earth elements boost NK income
Korea Times
Kang Hyun-kyung
2014-7-27

N. Korea exports US$1.8 mln worth of rare earth to China in May-June
Yonhap
2014-7-27

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North Korea encourages completion of large-scale projects to coincide with 2015 Party Foundation Day

Thursday, June 12th, 2014

Institute for Far Eastern Studies (IFES)
2014-6-12

North Korea is attempting to complete the construction of a large scale stockbreeding base and a power plant as symbols of “self-rehabilitation” by October 10, 2015 to coincide with the 70th anniversary of the foundation of the Worker’s Party of Korea (WPK). Adorned with these economic achievements, next year’s Party Foundation Day will seek to inspire confidence in the North Korean people and strengthen the foundation of the Kim Jong Un regime.

The Choson Sinbo, a news affiliate of the pro-North Korean General Association of Korean Residents in Japan, published an article on June 2, 2014 which introduces the Sepho County area of Kangwon Province and the current situation of construction at the stockbreeding complex, reporting that “all construction is planned to be completed by next year’s Party Foundation Day.” Sepho Tableland Construction Company, which began construction of the Sepho County stockbreeding complex toward the end of 2012, is a national company propagandized by Kim Jong Un as the “Great Plan for the Transformation of Nature.”

The construction of the North Pyongan Chongchon River Power Plant, another one of North Korea’s large scale projects, began in January 2013 and is also projected to be finished by next year’s anniversary. Secretary of the Worker’s Party of Korea Kim Ki Nam was quoted at an April 10, 2014 Pyongyang mass rally, saying, “We must magnificently complete the Chongchon River Power Plant and Sepho County Stockbreeding Base by the Party’s 70th anniversary as a proud gift to our motherland.”

The Chongchon River Power Plant and the Sepho Tableland have been chosen as the two main tasks to be completed in celebration of next year’s anniversary of the foundation of the WPK. The news outlet of the Worker’s Party, the Rodong Sinmun, pointed out in a May 11, 2014 article that the Chongchon River Power Plant will help alleviate the nation’s electricity shortage and stand as a symbol for the nation’s “self-rehabilitation spirit.”

In the past, North Korea has revealed new buildings and symbolic structures before and after major anniversaries in order to brighten the public mood; however, the Kim Jong Un regime’s decision to undertake two large-scale construction projects and finish them both by the anniversary date is worthy of attention.

North Korea is expected to raise their agricultural production goals based on the successful completion of the Sepho Tableland and Chongchon River Power Plant. In his letter to the National Conference of Agricultural Subworkteam Leaders in February 2014, Kim Jong Un stated, “From the year 2015, when we will greet the 70th anniversary of the founding of the Workers’ Party of Korea, [the agricultural sector] must hit higher grain production targets.”

Coinciding with the projected agricultural increase, the Choson Sinbo reported that production of livestock will also increase with the completion of the Sepho Tableland: “Annual meat production is expected to increase in stages, from five thousand tons in 2017 to ten thousand tons annually by the year 2020.” Provided that these two large-scale projects can be completed according to plan and produce successful results, it is expected that Kim Jong Un’s position within the Party will be strengthened considerably.

As much as the Sepho Tableland and Chongchon River Power Plant give confidence to the North Korean people that their food shortage problem is being solved, it is also assumed that Kim Jong Un will use the success of these projects in order to begin a legacy of his own “achievements.”

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An Updated Summary of Energy Supply and Demand in the Democratic People’s Republic Of Korea (DPRK)

Tuesday, April 15th, 2014

The Nautilus Institute has published a report on energy supply in the DPRK by David F. von Hippel and Peter Hayes. You can read it here.

Here is a small section of the paper:

Overall energy use per capita in the DPRK as of 1990 was relatively high, primarily due to inefficient use of fuels and reliance on coal. Coal is more difficult to use with high efficiency than oil products or gas. Based on our estimates, primary commercial energy[19] use in the DPRK in 1990 was approximately 70 GJ per capita, approximately three times the per capita commercial energy use in China in 1990, and somewhat over 50 percent of the 1990 per capita energy consumption in Japan (where 1990 GDP per-capita was some ten to twenty times higher than the DPRK). This sub-section provides a brief sketch of the DPRK energy sector, and some of its problems. Much more detailed reviews/estimates of energy demand and supply in the DPRK in 1990, 1996, and particularly in 2000, 2005, and 2008 through 2010, are provided in later chapters of this report.

The industrial sector is the largest consumer of all commercial fuels—particularly coal—in the DPRK. The transport sector consumes a substantial fraction of the oil products used in the country. Most transport energy use is for freight transport; the use of personal transport in the DPRK is very limited. The residential sector is a large user of coal and (in rural areas, though more recently, reportedly, in urban and peri-urban areas as well) biomass fuels. The military sector (by our estimates) consumes an important share of the refined oil products used in the country. The public/commercial and services sectors in the DPRK consume much smaller shares of fuels supplies in the DPRK than they do in industrialized countries, due primarily to the minimal development of the commercial sector in North Korea. Wood and crop wastes are used as fuels in the agricultural sector, and probably in some industrial subsectors as well.

Key energy-sector problems in the DPRK include:

*Inefficient and/or decaying infrastructure: Much of the energy-using infrastructure in the DPRK is reportedly (and visibly, to visitors to the country) antiquated and/or poorly maintained. Buildings apparently lack significant, and often any, insulation, and the heating circuits in residential and other buildings for the most part apparently cannot be controlled by residents. Industrial facilities are likewise either aging or based on outdated technology, and often (particularly in recent years) are operated at less-than-optimal capacities (from an energy-efficiency point of view).

*Suppressed and latent demand for energy services: Lack of fuels in many sectors of the DPRK economy has apparently caused demand for energy services to go unmet. Electricity outages are one obvious source of unmet demand, but there are also reports, for example, that portions of the DPRK fishing fleet have been idled for lack of diesel fuel. Residential heating is reportedly restricted in the winter (and some observers report that some public-sector and residential buildings have not received heat at all in recent years) to conserve fuel, resulting in uncomfortably cool inside temperatures.

The problem posed by suppressed and latent demand for energy services is that when and if supply constraints are removed there is likely to be a surge in energy (probably particularly electricity) use, as residents, industries, and other consumers of fuels increase their use of energy services toward desired levels. (This is a further argument, as elaborated later in this report, for making every effort to improve the efficiency of energy use in all sectors of the DPRK economy as restraints on energy supplies are reduced.)

*Lack of energy product markets: Compounding the risk of a surge in the use of energy services is the virtual lack of energy product markets in the DPRK. Without fuel pricing reforms, there will be few incentives for households and other energy users to adopt energy efficiency measures or otherwise control their fuels consumption. Recent years have seen limited attempts by the DPRK government to reform markets for energy products. Some private markets exist for local products like firewood, and some commercial fuels have in recent years reportedly been traded “unofficially” (on the black market), but for the most part, energy commodity markets in the DPRK essentially do not exist[20]. Energy consumers are also unlikely, without a massive and well-coordinated program of education about energy use and energy efficiency, to have the technical know-how to choose and make good use of energy efficiency technologies, even when and if such technologies are made available.

The DPRK’s energy sector needs are vast, and at the same time, as indicated by the only partial listing of problems many of these needs are sufficiently interconnected as to be particularly daunting to address. The DPRK’s energy sector needs include rebuilding/replacement of many of its power generation and almost all of its substation equipment, repair, replacement, and/or improvement of coal mine production equipment and safety systems, updating of oil refineries, improvement or replacement of most if its energy-using equipment, including coal-fired boilers, electric motors and drives, transport systems, and many other items, modernization of energy use throughout the country, rebuilding of the DPRK forest stocks, and a host of other needs. As one example of the interrelations of energy problems in the DPRK, renovating the DPRK’s coal mining sector is made more difficult because coal mines lack electricity due to electricity sector problems, and electricity generators in some cases have insufficient coal to supply power demand because of coal mine problems and problems with transporting coal to power plants.

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On the business of exporting coal…

Thursday, April 3rd, 2014

Taean-Port

 Pictured above (Google Earth): The coal-covered Taean Port on the Taedong River

Who knew that Rodong Sinmun was involved in the coal export business?

According to the Daily NK:

Gwangbokseongdae Co. [광복성대?], a hard currency-earning arm of the operator of the Party daily Rodong Sinmun, recently resumed coal exports through the West Sea port of Nampo, Daily NK has learned. Exports had been halted upon the orders of the Chosun Workers’ Party in October 2013.

The Kim regime is believed to have resumed exports to open up additional flows of hard currency for accounts earmarked for regime maintenance. Coal is one of North Korea’s biggest export industries, with almost all the coal produced in the country sent to China (though a percentage of it is coked and returned for use in North Korean power stations).

A source from South Pyongan Province reported the story to Daily NK on the 3rd, explaining that “Gwangboksongdae Co. has started exporting coal again; it was originally stopped by the Party last October.”

The source then went on to add, “So as to match the timing of [incoming] vessels and increase export volumes, the company is leasing its trucks to people.”

“It costs US$350 per day to lease the trucks. They travel from storage yards [owned by people who lease land from farms and use it for the storage and sale of coal] in mining areas of South Pyongan Province to Daean Port in Nampo. Vessels start coming in March, so leased trucks are again transporting coal for export.”

Companies exporting coal to China must have an export trade license from the North Korean authorities. Then they can use planned exports to China as security against the cost of leasing the trucks. From the point of view of the company, subcontracting in this manner, a practice that began in the mid-2000s, makes more sense than employing drivers directly.

There are many conditions attached to truck rental from Gwangboksongdae Co., however. According to the source, not only must lessees prove that they have $3000 with which to purchase coal; they must also have ten years of trucking experience and, of course, good connections in the Central Party.

But it is worth it. “The original price of a ton of coal is roughly $12,” he said. “This can then be sold at the storage yards in Nampo and Taean Port for $32, giving the driver a clear profit of $20 on each ton. If he carries an average load of 30t, he will earn $540. If we factor in the lease fee of $350 and cost of fuel, there is around $100 left per load.”

“Normally, drivers make around three trips per week,” he went on. “But truck repair costs are born by the lessee. If a vehicle is damaged, the lessee ends up with a significant burden as they can be held liable for compensation.”

According to trade statistics compiled by the Korean International Trade Association (KITA) in January 2014, North Korea exported 16.5 million tons of anthracite to China in 2013. This total, which marked a year-on-year increase of 39.7%, brought in approximately US$ 1.373bn, a 15.5% increase over 2012.

Read the full story here:
Trucks for Rent as Coal Exports Soar
Daily NK
Seol Song Ah
2014-4-3

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North Korea to utilize science and technology to overcome its energy crisis

Thursday, April 3rd, 2014

Institute for Far Eastern Studies (IFES)
2014-4-3

In order to solve the nation’s chronic energy shortage, North Korea has been focusing on the development and utilization of science and technology as much as possible. Recent technological advancements are being reported one after another, and further development of alternative energy sources has resulted in technology that will reduce the nation’s oil and fossil fuel consumption.

The Choson Sinbo, a news outlet published by the pro-North Korean General Association of Korean Residents in Japan, reported on March 22 that the research staff of North Korea’s National Academy of Sciences contributed to a reduction in coal consumption by successfully developing and implementing the use of compressed biomass fuel in several factories in Pyongyang. The article also reported the invention of a new navigation program at Pyongyang Machinery College that searches for and displays the shortest possible routes between destinations. Transportation facilities in Pyongyang are said to have seen a 5 to 10 percent savings in fuel consumption since the introduction of the program.

Earlier this month, the Choson Sinbo also reported that the urban management division at the Central Heating Research Institute developed a new, more efficient solar heating system that has already been installed in homes along Pyongyang’s Kwangbok Street. The new system utilizes the leftover water heated during the day to provide warmth for homes at night, and, unlike the previously used system, can do so without consuming electricity.

Such efforts to mobilize domestic natural resources can be interpreted as an earnest attempt at solving the nation’s chronic energy shortage. In his new year’s address, Kim Jong Un emphasized the need to more effectively utilize domestic natural resources such as wind, geothermal, solar, and especially hydro power to remedy the nation’s electricity shortage.

He also stressed the need to endure the struggle to save energy with strength and resolve, calling on all sectors of the economy to conserve each and every watt of electricity, gram of coal, and drop of water where possible. Although North Korean efforts to solve the nation’s energy shortage have been ongoing for some time, the regime seems to be putting additional weight on the role of science and technology.

This call for technological development, with particular regard to alternative energy, is directly connected to Kim Jong Un’s preferential policy toward scientists and technicians. The best example of this can be seen in the construction of Unha Scientists’ Street, a housing complex built in September of last year specifically for personnel who have contributed to missile and nuclear tests and additional construction has begun for Satellite Scientists’ Street which will serve as a residential and research complex for the scientists of North Korea’s national satellite program. The construction of these sites shows that the regime understands the importance of science and technology in raising the efficiency of not only the energy sector, but also the North Korean economy. Furthermore, this move stems not only from the preferential policy toward scientists and technicians, but from the larger context of reforming the nation’s educational system.

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North Korean oil tanker in Lybia (UPDATED)

Thursday, March 13th, 2014

UPDATE 4 (2014-3-17): US Navy Seals have boarded the Morning Glory.According to the BBC:

The raid by Navy Seals took place in international waters south of Cyprus, said spokesman Rear Adm John Kirby.

The Morning Glory’s evasion of a naval blockade at the eastern port of Sidra prompted Libya’s parliament to sack Prime Minister Ali Zeidan last week.

The oil terminal has been under the control of militia wanting autonomy for eastern Libya since July 2013.

Meanwhile, there has been a deadly attack on the barracks in the main eastern city of Benghazi.

This was their first attempt to export oil from rebel-held areas. It is not clear where the tanker was headed.

Adm Kirby said the operation had been authorised by President Barack Obama and that no-one had been hurt.

“The Morning Glory is carrying a cargo of oil owned by the Libyan government National Oil Company. The ship and its cargo were illicitly obtained,” he said, adding that it would now be returned to a Libyan port.

The vessel was flagged in North Korea but officials in Pyongyang said it had been deregistered because of the incident.

It was said to have been operated by an Egyptian company.

More in the Washington Post here.

See Marcus Noland’s comments here.

UPDATE 3 (2014-3-13): Morning Glory is on the run! According to The Diplomat:

…The Libyan government didn’t take kindly to this and threatened to attack the tanker, threatening airstrikes against it. Eventually, the tanker was intercepted and taken to Misrata where it was held by Libyan warships.

Remarkably, the North Korean tanker managed to escape its capture by the Libyan fleet in the middle of the night. It made its escape when the weather forced the smaller Libyan warships and patrol boats to sail close to the coast, leaving a gap in the convoy guarding the tanker. The Morning Glory made a run for the open seas and is now confirmed to be back in international waters according to Mohammad Hitab a spokesman for Libya’s al-Waha Oil Company, the state-run company running the Es Sider port.

It remains unknown the extent to which North Korea is communicating with Libya’s federalist rebels. In the case of the oil sale, the rebels were looking for buyers willing to purchase risky oil at rates far below the asking market price. Given North Korea’s energy situation, it appeared to be one of the few buyers interested in the deal. A report from the Libya Herald earlier this week noted that members of the federalist rebels were spotted on board the Morning Glory prior to its attempted departure from Es Sider port.

The tanker’s escape resulted in a no confidence vote on Prime Minister Ali Zeidan’s leadership in Libya. Zeidan lost the vote and had his travel barred. Libyan Defense Minister Abdallah al-Thinni was sworn in on Tuesday evening, according to Reuters.

The United States Department of State issued a statement where it said it was “deeply concerned by reports that a vessel sailing under the name Morning Glory is loading a cargo of illicitly obtained oil at the Libyan port of As-Sidra.” The statement does not mention North Korea but notes that the Morning Glory‘s ”action is counter to law and amounts to theft from the Libyan people.” The Italian Navy had reportedly assisted the Libyans in intercepting the Morning Glory but has since withdrawn from attempting to prevent the ship from leaving the Mediterranean.

UPDATE 2 (2014-3-12): Here is the full statement from KCNA on the tanker:

Spokesman for Maritime Administration of DPRK on “Oil Tanker Incident” in Libya

Pyongyang, March 12 (KCNA) — A spokesman for the Maritime Administration of the DPRK Wednesday gave the following answer to the question raised by KCNA in connection with the recent DPRK-flagged “oil tanker incident” which occurred in Libya:

On March 8 the government of Libya informed the DPRK of the fact that the DPRK-flagged oil tanker Morning Glory made an oil contract with an individual armed group in Libya and illegally entered a port under the control of the group in the eastern part of Libya, and urged the DPRK to take a necessary measure for settling it through a formal channel.

As far as the oil tanker is concerned, it is a ship run by the Golden East Logistics Company in Alexandria, Egypt and is allowed to temporarily use the DPRK flag for six months in accordance with the contract made by the company with the DPRK at the end of February.

Right after being informed of the fact by the Libyan side, the DPRK strongly blamed the company side for the violation of the contract and demanded it let the ship leave the port at once without loading oil.

In addition to it, the DPRK formally notified the Libyan government and the International Maritime Organization that it cancelled and deleted the ship’s DPRK registry and invalidated all the certificates as the ship violated the DPRK’s law on the registry of ships and the contract that prohibited it from transporting contraband cargo and entering the warring, dispute-torn or natural disaster-affected areas.

Therefore, the ship has nothing to do with the DPRK at present and it has no responsibility whatsoever as regards the ship.

What matters is that some foreign media are making much fuss, deliberately linking the case with the DPRK, claiming that “the north Korean ship tried to purchase oil from Libya in an illegal manner” and “the government force of Libya opened fire on the north Korean flagged oil tanker.”

Some forces are misleading the public opinion, persistently linking the issue with the DPRK. This is obviously aimed at achieving a sinister political purpose to tarnish its image.

They should clearly know that with neither false propaganda nor mud-slinging can they damage the image of the dignified DPRK.

The AP reports on proof the DPRK provided to the western media to back up its claims:

North Korea offers its flag to foreign-owned ships in the same way as a number of other countries do.

Jon provided a document he said was the official deletion of the Morning Glory from the Maritime Administration’s registry. He also showed email correspondence he said was from IHS Maritime in London, a company that manages shipping information, that purportedly acknowledged the deletion of a vessel from the North Korean registry.

UPDATE 1 (2014-3-12): The DPRK has denied it owns the ship. According to the Wall Street Journal:

North Korea denied on Thursday it was illegally exporting oil from rebel-controlled eastern Libya, claiming that an Egyptian company was operating a North Korean flagged oil tanker in the center of an armed standoff since Saturday.

North Korea said it had revoked the registry of the tanker, named “Morning Glory,” and demanded that Alexandria-based Golden East Logistics Company leave al-Sidra port without loading oil.

The tanker, carrying at least 234,000 barrels of crude oil, sailed from a rebel-controlled port into international waters on Tuesday.

A contract signed by North Korea with the Egyptian company prohibits the tanker from transporting contraband cargo and entering war or disaster zones, North Korea said through a report in its state media.

“The ship has nothing to do with the DPRK at present and it (North Korea) has no responsibility whatsoever as regards the ship,” the report said, using the abbreviation of country’s official name Democratic People’s Republic of Korea.

The Golden East Logistics Company couldn’t be immediately reached for comment.

The presence of a North Korean-flagged vessel in the Mediterranean is very unusual, although the country has been involved in trading arms in the region. Cheong Seong-chang, a senior analyst at Seoul-based think tank Sejong Institute, said the rebels may have offered oil to North Korea at a fraction of market prices.

ORIGINAL POST (2014-3-6): According to IBT:

A North Korean oil tanker has tried to dock at Libya’s Es-Sider port which has been seized by armed protesters, Reuters reports.

It has not yet been confirmed whether the tanker wanted to take oil from the protesters, who have threatened to sell it independently unless they get political autonomy from Tripoli and a greater share of oil revenues, according to Libyan officials.

“The tanker came to Es-Sider but did not load oil,” said an official at the state-owned Waha Oil Co, which operates the port and connecting oilfields.

An official at National Oil Corp (NOC), which owns Waha, said he did not know whether the protesters, led by former militia leader Ibrahim Jathran, had tried to attract buyers with the tanker but said: “We know they have been trying to sell oil.”

It is extremely unusual for a North Korean-flagged oil tanker to operate in the Mediterranean region, shipping sources said.

Jathran’s group seized three oil ports which accounted for 600,000 barrels per day of export, before the protests started in 2013.

The Libyan government has tried to end the protests but little progress has been made so far.

Libya’s defence minister held talks with protesters blocking the 340,000-bpd El Sharara oilfield in the south, but NOC has not confirmed whether it will reopen in the near future.

The strikers are also demanding national identity cards and a local council; the ministers have promised to meet the requests.

Jathran’s group declined to comment.

The Libyan navy fired on a Maltese-flagged tanker which allegedly tried to load oil from the protesters in the port in January.

Libya’s oil output has fallen to little over 200,000 bpd from 1.4 million bpd in July when protests started across the country.

“The financial situation of the government is difficult,” Culture Minister Habib al-Amin, who acts as a government spokesman, said in February.

“Some ministries have been unable to pay for expenditures due to a lack of budget and liquidity.”

Read the full story here:
Libya: North Korea Oil Tanker Tries to Dock at Seized Es-Sider Oil Port
International Business Times
Ludovica Iaccino
2014-3-6

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Prospects for North Korea’s anthracite exports to China

Monday, March 3rd, 2014

Institute for Far Eastern Studies (IFES)
2014-3-3

For North Korea, anthracite exports are a major means of foreign currency earnings and the country’s top export item to China. Exports are expected to continue to rise this year.

China’s year-on-year import of anthracite from North Korea increased 39.7 percent (16.49 million tons) from the previous year, accounting for 41.5 percent of the total amount of anthracite import for China (39.66 million tons). North Korea has now surpassed Vietnam as the top exporter of anthracite to China.

Other than natural resources, North Korea has virtually no other major export commodities to offer. The recent standstill in inter-Korean economic cooperation and toughened international sanctions has made it difficult for North Korea to earn foreign currency. Thus, North Korea has pushed for a steady increase in its hard coal exports to China. North Korean anthracite is considered to be of relatively high quality, maintaining a higher unit price (10 USD/ton) than Vietnamese anthracite.

Currently, China’s steel industry is the largest consumer of the North Korean anthracite, with the main consumers being local steel companies in Liaoning, Hebei, and Shandong Provinces, as they are geographically closer to North Korea and have easy access to shipping ports.

The market for North Korean anthracite is expected to expand. Since last year, the Chinese government began to implement wide-ranging air-pollution management measures. As a result, Chinese authorities designated the Hebei Province and the surrounding areas of Beijing and Tianjin municipalities as key areas to improve and control air pollution. With the help of allocated subsidies from the central government, local governments began to distribute hard coal briquettes to homes in farming villages. China’s major anthracite producing areas are in remote mountainous regions. So the demand for North Korean anthracite briquettes is anticipated to increase.

Late last year, the former head of the (North) Korean Workers’ Party Jang Song Thaek was accused, charged and executed for, among other “anti-state activities,” selling the country’s “precious [natural] resources” (presumably to China) at very cheap prices. But his execution does not appear to have made a significant impact on the anthracite trade between the DPRK and China. With China’s growing demand for North Korean anthracite, the export volume is expected to rise.

However, some argue that despite the growing demand North Korea’s coal production capacity is limited and will experience difficulties. Currently, North Korea has already suppressed significantly its domestic demand in order to meet the export volume. North Korea’s mining facilities are said to be old and badly in need of repairs, but large investments from Chinese companies that could be put toward this endeavor are reported to have dried up.

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More measurement of the importance of markets in the DPRK: residential and public sector energy consumption

Monday, February 3rd, 2014

According to Yonhap (via the Korea Herald):

A fuel ration system in North Korea seems to have been dismantled due to a chronic fuel shortage, a report said Monday.

The report by the state-run Korea Energy Economics Institute (KEEI) said a majority of households in North Korea secure their fuel for heating and cooking on the black market or by themselves, hinting that the country’s fuel ration system might have been scrapped.

The report was made on the basis of data compiled from a poll of 350 North Korean defectors who fled the country after 2011.

According to the report, 51.1 percent of the North’s households bought their heating and cooking fuel on the market, with 42 percent gathering their fuel, such as firewood, by themselves.

Only 6.8 percent of them were provided with fuel for heating and cooking through the country’s fuel ration channel.

The energy consumption of a North Korean household was estimated at 0.291 tons of oil equivalent (TOE) as of 2011. The TOE is a unit of energy which is equivalent to the amount of energy released by burning one ton of crude oil.

The consumption of energy gaining from coal briquettes accounted for 36.8 percent of the total, reaching 0.107 TOE, followed by wood with 0.069 TOE, electricity with 0.038 TOE, oil products with 0.025 TOE and propane gas with 0.023 TOE.

The energy consumption for heating took up 50.9 percent of the total, amounting to 0.148 TOE.

The KEEI said a program for fuel aid to North Korea should be mapped out on the basis of exact data on the energy consumption in the North’s private sector.

You can download the full report here in Korean (PDF). Here is the web page for the Korea Energy Economics Institute.

Read the full story here:
Fuel ration seems to have been dismantled in N. Korea: report
Yonhap
2014-2-3

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China – DPRK trade data (January 2014)

Sunday, February 2nd, 2014

Yonhap reports that China – DPRK trade appears unaffected by the purge of Jang Song-thaek. According to the article:

Despite North Korea’s stunning execution of the leader’s uncle in December, its trade with China remained solid in January, up 16 percent from a year earlier, data showed Friday.

Jang Song-thaek, the country’s No. 2 man and leader Kim Jong-un’s uncle, had played an important role in dealing with Beijing before being executed late last year on treason charges. The political upheaval raised concerns over a possible instability that could spill over into other areas of the reclusive country’s moribund economy and society.

Still, trade volume between North Korea and its major trading partner China came to US$546 million in January, compared with $471 million from a year earlier, according to the data compiled by the Korea International Trade Association (KITA).

North Korean exports to China jumped 18 percent on-year to $223 million, with imports rising 14.5 percent to $323 million, the data showed.

Anthracite was the No. 1 export item for the impoverished country to its communist neighbor, selling some $101 million worth of the natural resource last month, up 21.3 percent from a year ago.

North Korea’s anthracite exports are a major source of income, and China is virtually the only destination for the shipments.

Inbound shipments of China-made cell phones soared 28 percent on-year to $14.4 million in January, the data showed.

“Trade volume between the two countries is expected to rise further given China’s growing demand for minerals for its project to develop its three northeastern provinces of Heilongjiang, Jilin and Liaoning,” said Lim Eul-chul, a research professor at Kyungnam University.

“Such political variables as Jang’s execution would not likely affect the trend,” he added.

The heavily sanctioned North Korea has been increasingly reliant on China, though the Asian giant has become frustrated with its wayward neighbor, particularly after Pyongyang’s third nuclear test early last year.

In 2013, trade volume between the two reached a record $6.45 billion last year, up 10.4 percent from the previous year, according to KITA data.

The Wall Street Journal notes:

“Bilateral trade has probably yet to feel the impact of Mr. Jang’s execution,” said Cho Bong-hyun, research fellow at Seoul-based IBK Economic Research Institute.

“Both sides are still acting on trade contracts that have already been signed and usually take effect for six months,” Mr. Cho said.

Mr. Cho said he expects the impact from Mr. Jang’s purge will begin to appear in the data from the second quarter of this year. North Korea may also increasingly turn to trade with South Korea following a thawing of ties and the reopening of a jointly run Kaesong industrial park, he said.

The KITA data show inter-Korean trade volume shrank 42% to an eight-year low of $1.15 billion last year, when the Kaesong complex was closed for several months after North Korea pulled out its workers.

North Korean-Chinese trade volume hit a record high of $6.54 billion last year, according to KITA, as North Korea exported natural resources such as coal and iron ore, while importing fuel and electronics goods.

The Korea Trade-Investment Promotion Agency, Seoul’s state-funded trade agency, said in a report last year that North Korea’s bilateral trade with China accounted for 88% of Pyongyang’s entire external trade in 2012, up from 53% in 2005.

Read the full stories here:
N. Korea, China trade unaffected by stunning execution: data
Yonhap
2014-2-28

Jang Purge Yet to Hurt North Korea-China Trade
Wall Street Journal
Kwanwoo Jun
2014-2-28

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