Archive for the ‘Mining/Minerals’ 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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DPRK Restaurant opens/closes/opens in the Netherlands

Monday, January 27th, 2014

UPDATE 2 (2014-1-27): The North Korean restaurant has re-opened in Amsterdam. According to NK News:

While the Pyongyang Restaurant [See Below] shut down the same year as it opened – allegedly due to a dispute between the Dutch owner Remco Van Daal and its North Korean staff – the Haedongwha staff will now be managed in cooperation with an ethnic Korean manager named John Kim.

Kim, who has lived in the Netherlands for most of his life, also runs a business in Pyongyang exporting sand to Singapore, a source familiar with his background told NK News.

Unlike Haedangwha restaurants in China, which are run directly by the North Korean government, the Netherlands branch is unique in having non-North Korean ownership but a North Korean staff.

You can read more about the restaurant in Het Parool.

Michael Madden tracked down the location.

Here is the official web page of the restaurant.

Learn more about the “other” Haedanghwa here.

UPDATE 1 (2012-9-6): The restaurant has closed. According to the Associated Press:

A North Korean restaurant in Amsterdam staffed by cooks and waitresses from the isolated country has closed its doors.

Dutch newspaper De Telegraaf reported Thursday that Pyongyang Restaurant’s closure was permanent and stemmed from a disagreement between its Dutch owners and North Korean staff.

The restaurant was an oddity, believed to be the only of its kind in Western Europe, though there are similar restaurants in Asia. Dutch labor authorities say North Koreans can get work visas for Europe under standard rules, but few do.

A woman who answered the phone at the restaurant said the establishment was closed. She couldn’t say for how long because she was not authorized to do so. Its website says it is closed “due to holidays.” Phone calls to the owner Thursday went unanswered.

See more here at North Korea Leadership Watch.

ORIGINAL POST (2012-2-5): According to Yonhap:

A North Korean restaurant has opened in the Dutch capital of Amsterdam in what could be the communist nation’s latest attempt to earn hard currency and foster closer ties with Europe.

The “Pyongyang Restaurant” was launched late last month under a joint venture between North Korea and two Dutch businessmen. While North Korea is known to operate dozens of restaurants across Asia, it is the first time a North Korean restaurant has opened in Europe, with the exception of a canteen that briefly operated near the North Korean Embassy in Vienna in the mid-1990’s, according to a local source, who spoke on the condition of anonymity.

The restaurant is staffed by nine North Koreans, including the director and manager, Han Myong-hee, who worked for 15 years at a North Korean restaurant in Beijing operated by the North’s ruling Workers’ Party.

Pyongyang Restaurant, which seats 24 people, has its walls covered with pictures of Pyongyang and North Korean nature, while its menu consists solely of a nine-course meal priced at 79 euros (US$104).

Han said there are plans to offer more affordable dishes such as Korean noodles and dumplings after the restaurant’s official opening on Feb. 17.

“After our official launch, we plan to gradually serve a variety of dishes and during lunch hours as well,” she said. The restaurant currently serves only dinner.

The opening ceremony is expected to be attended by the North Korean ambassador to Switzerland, other North Koreans, and key figures from the Netherlands and different European nations, Han said.

Analysts said the restaurant is likely to serve not only as a source of much-needed cash but also as a bridge to Europe for the isolated North.

“North Korea has been putting a lot of effort into normalizing relations with European nations since 2000,” said Yang Moo-jin, a professor at the University of North Korean Studies in Seoul. “The opening of North Korea’s first restaurant in Europe can be seen as the North’s attempt to improve ties with the West through exchanges at the civilian level.”

Read the full story here:
N. Korean restaurant opens in Netherlands
Yonhap
2012-2-5

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DPRK consolidates gold export revenues

Friday, December 27th, 2013

According to the Daily NK:

Approximately two months prior to the purge of Jang Sung Taek, the North Korean authorities halted exports of gold ore from the mines of Hwanghae Province in the southwest of the country, Daily NK has learned.

The step allegedly followed the discovery of improprieties in the operation of mining enterprises managed by persons linked with Jang, and formed part of measures designed to bring foreign currency-earning activities en masse under strict Central Party control.

“The order to halt exports was handed down in October, some months before the official news of the purge of Jang Sung Taek,” a source involved in the industry told Daily NK on the 27th. “It was even applied to foreign currency-earners affiliated with Central Party organs, as well as those from normal provincial-level agencies.”

“A directive ordering operations to cease from the second half of the year was issued to Holdong and Eunpa mines in Yeonsan County, North Hwanghae Province. These mines are shut now and their shafts are just filling up with water,” the source went on. “Mine officials have told me that this order came down stating that neither provincial nor Central Party managed-enterprises were allowed to mine for gold.”

“By doing this just a few months before the Jang Song Taek purge, the authorities moved to integrate foreign currency-earning activities and confiscate those enterprises and funds formerly managed by Jang prior to his purging,” he added. Explicating his view of the logic behind the step, he went on, “[The authorities] wish to greatly reinforce their control over these foreign-currency earning enterprises’ resources so as to bring together the management of Kim Jong Eun’s ruling funds.”

“I am told that they discovered that the enterprises Jang was managing had not been passing their profits to the state in the prescribed manner, so they halted the trade completely” the source alleged. “They controlled the mines, saying that the reason was because Jang was flogging off natural resources for a low price.”

“Previously, only ore with a purity of 20-30g of gold per ton could be exported, so any ore with a lower purity than this was not controlled. But now they are stopping all gold ore from exiting,” he went on to explain, adding that the ban is causing serious problems for the region’s miners, many of whom rely in large part on income from the mines for their survival.

“They used to share export licenses with other enterprises and export ore that way, too, but right now that is also totally prohibited,” he added.

Read the full story here:
Gold Mining Stopped to Unify Funds
Daily NK
Oh Se Hyeok
2013-12-27

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Economic gap between the two Koreas

Monday, December 23rd, 2013

According to Yonhap:

Trade and economic levels between South and North Korea remained quite wide last year, data showed Monday, pointing to prolonged lackluster business and economic conditions in the reclusive North.

According to the data by Statistics Korea, South Korea’s total trade volume stood at US$1.07 trillion as of 2012, which is 157 times larger than the North’s $6.8 billion. In particular, the South’s exports came to $547.9 billion, 188.9 times larger than those of the North.

The nominal gross national income (GNI) levels between the two Koreas also remained wide.

The GNI for the South was estimated at 1,279.5 trillion won ($1.21 trillion) last year, 38.2 times larger than the North, the data showed. On a per-capita basis, South Korea’s GNI was 18.7 times larger than that of the North.

South Korea also outperformed the North in infrastructure and other social overhead capital spending.

The South’s road network totaled 105,703 kilometers, which compared with the 26,114 km for the North, the data showed. The South had the power generating capacity of 81.8 million kilowatts a year, which is 11.3 times larger than the North.

The only category that the North outperformed the South was in coal production. It produced a total of 25.8 million tons of coal last year, about 10 times the amount of coal produced by the South, according to the data.

The two Koreas had a combined population of 74.4 million, with the South holding a population of about 50 million, the data showed.

The statistics agency has been providing such information on the North every year since 1995 as a way to provide a glimpse into the economic and industrial conditions of the reclusive country.

Read the full story here:
Trade, economic gaps between 2 Koreas remain wide: data
Yonhap
2013-12-23

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Jang Song-thaek purge [UPDATED]

Monday, December 9th, 2013

UPDATE 29 (2014-8-30): The Asahi Shimbun reports on speculated collateral damage:

The purge and execution of North Korea’s de facto No. 2 man eight months ago has resulted in uncertain fates for his associates, some of whom have since been promoted and another likely incarcerated in a political prison camp.

Jang Song Thaek was the uncle to North Korean leader Kim Jong Un through marriage to the younger sister of Kim Jong Il, the late father and predecessor of Kim Jong Un.

Tokyo, Seoul and other parties believe struggles over concessions set the stage for the purge of Jang, who served as vice chairman of the powerful National Defense Commission.

The cadre of the country’s ruling Workers’ Party of Korea included many who had worked with Jang.

Kim Yang Gon, director of the party’s United Front Department, Kim Yong Il, director of the party’s International Department, and Kang Sok Ju, a party secretary, all worked under Jang when he was a section chief in the party’s Organization and Guidance Department in charge of the Foreign Ministry.

Choe Ryong Hae, another party secretary, and Mun Kyong Dok, former chief secretary of the Pyongyang municipal party committee, both worked with Jang when he held a senior position in the party’s youth work department.

Kang Sok Ju remains influential even after Jang’s execution in December. He was likely appointed a party secretary in charge of international affairs in April.

South Korean government officials said Kang recently met a visiting delegation of European political parties. Kang told the delegation that talks between Washington and Pyongyang are expected to take place in January next year, after U.S. midterm elections in November, according to the officials.

Choe Ryong Hae was also appointed a party secretary in April, although he was dismissed as director of the General Political Bureau of the military.

“Choe was held in low regard within the military but remains in the forefront because he has the trust of Kim Jong Un,” said a source well-versed in North Korean affairs.

Ri Su Yong, who is believed to have been under Jang’s direction in the former Commission for Joint Venture and Investment, was promoted to foreign minister in April.

Ji Jae Ryong, ambassador to China and a purported close aide to Jang, also remains politically active.

But life has turned miserable for Mun Kyong Dok, who Tokyo and Seoul believe has likely been sent to a political prison camp.

Kim Yang Gon has been spared a fall from grace, but rumors say he was seriously injured with a broken leg or is receiving about six months of political re-education.

Kim Yong Il may remain the director of the International Department, but he has undeniably lost his clout. There are rumors about his possible transfer to an ambassadorship.

That raises questions about why Jang’s purported associates have been treated differently.

Tokyo and Seoul believe struggles between Jang and the military over concessions set the stage for Jang’s purge.

Jang ordered concessions held by trading companies and other parties under the military’s umbrella to be moved to the Cabinet, the party’s Administrative Department, and other sectors under his own influence, partly because Kim Jong Il had misgivings about the military’s rise in power. The offended military likely co-opted Kim Jong Un to engineer Jang’s purge, according to the story.

No major change has, in fact, been seen in North Korea’s political line since Jang was purged.

“The incident did not develop into a full-scale purge of all officials concerned because it was not a political struggle,” a South Korean government official said.

Choe and other senior officials have taken turns avoiding being mentioned in official news reports for certain periods of time since Jang was purged. They were apparently questioned during those periods over whether they received any distribution of interest from Jang, the findings of which likely decided the fates of officials associated with him.

UPDATE 28 (2014-8-7): The South Korean media reports on the continuing fallout from the Jang purge:

The North Korean regime has shut down the Workers Party department once headed by purged eminence grise Jang Song-taek and executed or interned 11 high-ranking officials, sources said Sunday.

One of them was burned alive.

A source said the regime is preparing a third purge of officials who supported Jang. The first purge involved his family, relatives and high-ranking party officials, while the second purge underway. The third will target his supporters in provincial chapters of the Workers Party.

The source said Jang’s elder sister Kye-sun and her husband and ambassador to Cuba Jon Yong-jin, as well as their son-in-law Kim Yong-ho, who was head of a trading company, were executed. But ambassador to Malaysia Jang Yong-chol, Jang’s nephew, escaped with his life.

He was sent to a concentration camp shortly after Jang Song-taek’s execution but was ordered to return to Pyongyang without a job after South Korean media reported rumors of his execution, the source added.

Jang’s closest confidants Ri Yong-ha and Jang Su-gil as well as nine other high-ranking party officials were purged, while around 100 lower-ranking party officials loyal to Jang were sacked.

O Sang-hon, a deputy minister at the Ministry of Public Security, was “executed by flamethrower,” the source said.

The reason for the horrific method that he had turned the ministry into Jang’s personal protection squad, the source added. O managed a bureau in the ministry as his personal security service and raised its status to the same rank as officials guarding leader Kim Jong-un.

UPDATE 27 (2014-5): For what it is worth, Dennis Rodman claims that Jang Song-thaek is still alive. According to an interview with Dujour:

DJ: And the accusations about him having his family members killed…

DR: You could say anything here about North Korea and people would believe it. The last time I went there, when they said they killed his girlfriend, they killed his uncle, they just fed him to the dogs… They were standing right behind me.

DJ: You’re saying that the uncle that the North Korean government itself confirms was executed is actually alive?

DR: He was standing right there.

UPDATE 26 (2014-4-7): More rumors from the Chosun Ibo on the purge of Jang song-thaek:

The North Korean regime has shut down the Workers Party department once headed by purged eminence grise Jang Song-taek and executed or interned 11 high-ranking officials, sources said Sunday.

One of them was burned alive.

A source said the regime is preparing a third purge of officials who supported Jang. The first purge involved his family, relatives and high-ranking party officials, while the second purge underway. The third will target his supporters in provincial chapters of the Workers Party.

The source said Jang’s elder sister Kye-sun and her husband and ambassador to Cuba Jon Yong-jin, as well as their son-in-law Kim Yong-ho, who was head of a trading company, were executed. But ambassador to Malaysia Jang Yong-chol, Jang’s nephew, escaped with his life.

He was sent to a concentration camp shortly after Jang Song-taek’s execution but was ordered to return to Pyongyang without a job after South Korean media reported rumors of his execution, the source added.

Jang’s closest confidants Ri Yong-ha and Jang Su-gil as well as nine other high-ranking party officials were purged, while around 100 lower-ranking party officials loyal to Jang were sacked.

O Sang-hon, a deputy minister at the Ministry of Public Security, was “executed by flamethrower,” the source said.

The reason for the horrific method that he had turned the ministry into Jang’s personal protection squad, the source added. O managed a bureau in the ministry as his personal security service and raised its status to the same rank as officials guarding leader Kim Jong-un.

UPDATE 25 (2014-2-13): The DPRK has a new ambassador to Laos.

UPDATE 24 (2014-2-8): KCNA reports that the DPRK has replaced its ambassador to Nepal:

DPRK Ambassador to Nepal Appointed
Pyongyang, February 8 (KCNA) — Kim Yong Hak was appointed as DPRK ambassador to Nepal, according to a decree of the Presidium of the Supreme People’s Assembly of the DPRK.

UPDATE 25 (2014-2-5): RFA reports that dozens of entertainers and performers linked to Jang Song-thaek have been imprisoned:

North Korea’s leader Kim Jong Un has ordered the jailing of 40 popular actors and actresses as part of his relentless crackdown on those closely linked to his executed uncle, sources say.

Jang Song Thaek’s execution two months ago followed a massive purge in the government and military, and Kim seems to be moving now to flush out Jang’s allies in the entertainment industry, according to the sources.

“About 40 entertainers, referred to as a group linked to Jang Song Thaek, have been sent to Soosung prison in Chongjin in North Hamgyong province,” a source told RFA’s Korean Service, referring to a detention facility that is usually reserved for “first class” political prisoners.

“I heard this from a North Korean official of North Hamgyong province who is in charge of earning foreign currency,” the source said, as if to reinforce the credibility of his information.

The source said he was informed that entertainers belonging to such popular groups as the Chosun Art Film Studio, Pyongyang Circus Troupe, and Mansudae Art Theater were taken to the prison facility on Jan. 17 in two trucks.

Among those thrown in prison were Ryu Jin Ah, a singer with the Moranbong Band who was known to be Jang’s “lover,” and Li Yik Seung, an actor with Chosun Art Film Studio believed to be involved in “procuring” actresses for Jang and officials close to him, another source said.

The Moranbong Band made a public appearance in July 2012 on Kim’s orders and Ryu was bestowed a top entertainer title a year later, according to the official Korean Central News Agency.

Li, who won the Kim Jong Il Award in February 2012, played the role of a mine owner in “Comrade Kim Goes Flying,” a 2012 romantic comedy film co-produced by North Korea, Britain, and Belgium.

‘Womanizing problem’

The second source, also speaking on condition of anonymity, said Ryu and Li were linked to the 67-year-old Jang’s “womanizing problem,” cited as among reasons for his execution aside from the more serious charges of attempting to overthrow the government and seize power from his nephew.

“It is well known among residents in North Hamgyong province that a number of entertainers have been confined in the Soosung prison in Chongjin,” the source said.

A former Japanese chef for the Kim family told RFA recently that Kim had ordered Jang’s execution for his role in procuring teenage girls to satisfy the sexual desires of Kim’s father and Jang himself.

Chef Kenji Fujimoto said that by having Jang killed, Kim “wanted to prove that he’s different” from his father Kim Jong Il and his grandfather Kim Il Sung, both of whom he said had “quite a history with women.”

Fujimoto, who was Kim Jong Il’s personal sushi chef from 1988 to 2001, claimed that aside from his official duties as de facto number two to Kim Jong Il, the 67-year-old Jang had been in charge of a “pleasure division” tasked with recruiting girls aged 15-16 years for the late dictator.

In his New Year message broadcast on state TV, Kim Jong Un defended the execution of his uncle—who was married to his father’s sister—saying it was a “resolute action” and labeling Jang “scum.”

Jang was also de facto number two under the junior Kim before his execution and was considered instrumental in his rise to power in December 2011.

Sources inside North Korea had told RFA earlier that Kim was already purging the country’s military officer corps of personnel linked to Jang in a massive shake-up that has led to a freeze on military exercises and delayed replacement of cadres in the ruling party but raised promotion prospects for younger officers.

UPDATE 23 (2014-2-3): The DPRK’s ambassador to the United Kingdom gave an interview in which he discussed the purge of Jang Song-thaek. According to the Hankyoreh:

Hyun Hak-bong, North Korean ambassador to the United Kingdom, told the UK’s Sky News that Jang Song-thaek, former head of the administrative division of the Korean Workers’ Party, was executed for misappropriation of public funds.

When the subject of Jang came up in an interview on Jan. 30, Hyun said that Jang was sentenced to death in the court according to the law and that he was shot to death. This is the first time that a North Korean official has explained on the record why and how Jang was executed. Asked about the crimes Jang was charged with, Hyun said that he had committed the acts in question, anti-state acts, and that he had abused his authority and driven the North Korean economy into the ground. Hyun said that among Jang’s crimes was the misuse of 4.6 million euros in 2009.

In 2009, North Korean leader Kim Jong-un’s father Kim Jong-il was still alive. This implies that after Kim Jong-un took power, he suddenly took issue with something that had happened four years earlier.

In regard to this, Hyun said that the party had forgiven Jang’s behavior on several occasions in the past, but that this time his actions went “beyond the red line,” stressing that execution had been the only option.

Addressing reports that Jang’s family and relatives had been killed as well, Hyun called these fabricated reports and dismissed them as “political propaganda by our enemies.” However, when the interviewer asked Hyun if Jang’s family was still alive, the ambassador avoided a definitive response. “I know he was punished but if his family were punished or not, I don’t know,” Hyun said.

UPDATE 22 (2014-1-28): Rimjingang offers some speculation on the continued purges of Jang’s associates.

UPDATE 21 (2014-1-22): Alexandre Mansourov  provides a detailed chronology of Jang’s fall from grace in 38 North.

UPDATE 20 (2014-1-20): Choson Ilbo reports that O Kuk-ryol has been taking over Jang’s portfolio:

A senior North Korean source on Sunday said O is gaining control of the financial operations of the National Defense Commission that was once managed by Jang as well as other business interests.

O has crucially gained control of agencies in charge of bringing in foreign currency such as a body created by Jang to develop an economic zone in Sinuiju near the border with China.

He has thus regained rights to the development of Rajin-Sonbong port, exports of seafood and gold mining that Jang stripped him of in 2010.

Radio Free Asia in the U.S. reported that companies managed by O have had exclusive control of LPG import licenses from China and Russia since Jang’s execution.

UPDATE 19 (2014-1-6): Pyongyang has replaced its coal industry and metal industry ministers. According to the Korea Herald

The North’s official Korean Central News Agency on Sunday introduced Mun Myong-hak as coal industry minister, a position held by Rim Nam-su at least until a year ago, while reporting on the 30th anniversary of a coal mining complex in the western province of South Pyongan.

The charges culminating in Jang’s death unveiled by the KCNA included underpricing overseas “precious underground resources including coal” and land within an up-and-coming special economic zone.

The mineral-rich North has long been seeking to shore up its crumbling economy through exports of coal, iron ore, hard coal and other resources, mostly to China.

Seoul’s spy chief Nam Jae-joon late last month ascribed Jang’s shock purge to discords among the elite over lucrative coal export business.

It remains unclear, however, whether Jang and Rim had had a close relationship.

Former manager of a youth coal mine in South Pyongan, Mun was twice named a member of the Supreme People’s Assembly, in 2003 and 2009, before being introduced last January as head of a youth coal mining complex in Sunchon in the region.

His appointment was the latest in an ongoing personnel shakeup in Pyongyang.

On Thursday, Korean Central Television introduced Kim Yong-kwang as metal industry minister as it aired the reactions of ministry officials to Kim Jong-un’s New Year address. His predecessor Han Hyo-yon last appeared in state media last June.

Kim was vice metal industry minister from June 2008 and manager of a mining complex in Musan, North Hamgyong Province, from December 2011, and was nominated to the steering committee of the funeral of late leader Kim Jong-il around then.

“Our metal industry will actively contribute to strengthening national power by bringing up the working classes’ combative enthusiasm and reproducing steel,” he told the broadcaster on Thursday.

The Choson Sinbo, a pro-Pyongyang newspaper in Japan, said last month that Kim Jong-ha has become secretary of the Cabinet secretariat, succeeding Kim Yong-ho.

UPDATE 18 (2013-12-30): North Korea has recalled its deputy ambassador to UNESCO. According to Yonhap:

North Korea’s deputy ambassador to UNESCO was called back to Pyongyang from Paris on Monday, a diplomatic source said, marking the latest summoning of North Korean diplomats following the recent execution of leader Kim Jong-un’s uncle.

Hong Yong, the North’s deputy permanent delegate to UNESCO, and his wife were spotted at the Beijing airport before boarding an Air Koryo flight earlier in the day, the source said on the condition of anonymity.

Last week, the North’s ambassador to Sweden, Pak Kwang-chol, returned to North Korea. Pak was one of the close aides to the purged uncle, Jang Song-thaek.

“North Korea appears to be intensively carrying out recalls of high-ranking diplomats,” the source said.

“A number of North Korean diplomats, trade officials and businessmen, who served as close subordinates of Jang Song-thaek, have been returned home,” the source said.

North Korea’s ambassador to China, Ji Jae-ryong, has been conducting business as usual, but North Korean diplomats in Beijing “have been recently trying to refrain from outdoor activities,” the source said.

Ji, 71, has shared the same political fate as Jang over the past three decades and served as a “linking pin” between Jang and the Chinese leadership since he took up the post in 2010.

Earlier this month, the North’s ambassador to Malaysia, Jang Yong-chol, a nephew of the executed uncle, had also been summoned back to the country.

Mr. Hong had apparently held the post for just six months.

UPDATE 17 (2013-12-27): Yonhap reports that the DPRK’s ambassador to Sweden has been recalled. According to the article:

North Korean ambassador to Sweden, Pak Kwang-chol, was called back to Pyongyang on Friday, a diplomatic source said, marking the latest recall of North Korean diplomats following the recent execution of leader Kim Jong-un’s uncle.

Pak, one of close aides to the purged uncle, Jang Song-thaek, returned to North Korea via an Air Koryo flight after making a brief stopover in Beijing earlier in the day, the source said on the condition of anonymity.

Escorted by North Korean officials, Pak and his wife were spotted at Beijing airport before boarding the Air Koryo flight, the source said.

Park took up the post in September last year, according to a report by the North’s state media.

UPDATE 16 (2013-12-23): South Korea’s spy chief states that Jang’s demise stemmed from business dealings. According to AFP:

The shock purge and execution of the North Korean leader’s uncle stemmed from his attempts to take control of the country’s lucrative coal export business, South Korea’s spy chief told lawmakers Monday.

The execution — the biggest political upheaval since Kim took power two years ago — sparked speculation that Jang had lost out in a power struggle with hardline army generals.

But Nam Jae-Joon, the head of South Korea’s National Intelligence Service, said Jang’s attempts to secure control of state-run natural resources businesses played a big part in his downfall.

Nam, briefing members of parliament’s intelligence committee on the situation in the North, also said the young ruler currently “appears to have no problem” in his grip on power — but may stage armed provocations against the South sometime between January and March to rally domestic unity.

“Jang intervened too much in lucrative state businesses… related to coal, which drew mounting complaints from other [related] state bodies,” lawmaker Jung Chung-Rae, a member of the committee, quoted Nam as saying at the closed hearing.

Jang for years handled the country’s mineral exports, which go mostly to China.

The impoverished but mineral-rich North has sought for years to bolster its crumbling economy by increasing exports of coal and other minerals, which account for the bulk of its exports to China.

But Jang and his associates angered other top party officials by rapidly expanding their control over the coveted mineral businesses, Jung quoted Nam as saying.

“Kim Jong-Un was briefed about it… and issued orders to correct the situation,” Jung told reporters.

But many officials loyal to Jang did not immediately accept his orders, which eventually led an angry Kim to launch a sweeping purge, the lawmaker quoted the spy chief as saying.

The regime is currently probing officials in the ruling party’s administrative department once supervised by Jang as well as other state-run trading arms, Nam was quoted as saying.

According to the New York Times, also covered the announcement, though this telling of the story focuses more on a dispute that erupted from fishing rights:

The execution of the uncle of Kim Jong-un, North Korea’s leader, had its roots in a firefight between forces loyal to Mr. Kim and those supporting the man who was supposed to be his regent, according to accounts that are being pieced together by South Korean and American officials. The clash was over who would profit from North Korea’s most lucrative exports: coal, clams and crabs.

North Korean military forces were deployed to retake control of one of the sources of those exports, the rich crab and clam fishing grounds that Jang Song-thaek, the uncle of the country’s untested, 30-year-old leader, had seized from the military. In the battle for control of the fishing grounds, the emaciated, poorly trained North Korean forces “were beaten — very badly — by Uncle Jang’s loyalists,” according to one official.

The rout of his forces appears to have been the final straw for Mr. Kim, who saw his 67-year-old uncle as a threat to his authority over the military and, just as important, to his own family’s dwindling sources of revenue. Eventually, at Mr. Kim’s order, the North Korean military came back with a larger force and prevailed. Soon, Mr. Jang’s two top lieutenants were executed.

The two men died in front of a firing squad. But instead of rifles, the squad used antiaircraft machine guns, a form of execution that according to South Korean intelligence officials and news media was similar to the one used against some North Korean artists in August. Days later, Mr. Jang himself was publicly denounced, tried and executed, by more traditional means.

Given the opaqueness of North Korea’s inner circle, many details of the struggle between Mr. Kim and his uncle remain murky. But what is known suggests that while Mr. Kim has consolidated control and eliminated a potential rival, it has been at a huge cost: The open warfare between the two factions has revealed a huge fracture inside the country’s elite over who pockets the foreign currency — mostly Chinese renminbi — the country earns from the few nonnuclear exports its trading partners desire.

..

But when Mr. Kim succeeded his father two years ago, he took away some of the military’s fishing and trading rights and handed them to his cabinet, which he designated as the main agency to revive the economy. Mr. Jang was believed to have been a leading proponent of curtailing the military’s economic power.

r. Jang appears to have consolidated many of those trading rights under his own control — meaning that profits from the coal, crabs and clams went into his accounts, or those of state institutions under his control, including the administrative department of the ruling Workers’ Party of Korea, which he headed.

But this fall, the long-brewing tensions that arrangement created broke into the open. Radio Free Asia, in a report last week that cited anonymous North Korean sources, reported that Mr. Kim saw North Korean soldiers malnourished during his recent visits to islands near the disputed western sea border. They say he ordered Mr. Jang to hand over the operation of nearby fishing grounds back to the military.

According to accounts put together by South Korean and American officials, Mr. Jang and his associates resisted. When a company of about 150 North Korean soldiers showed up at the farm, Mr. Jang’s loyalists refused to hand over the operation, insisting that Mr. Jang himself would have to approve. The confrontation escalated into a gun battle, and Radio Free Asia reports that two soldiers were killed and that the army backed off. Officials say the number of casualties is unknown, but they have received similar accounts.

It is hard to know exactly how large a role the episode played in Mr. Jang’s downfall — there is more money in coal than in seafood — but Mr. Kim was reportedly enraged when he heard of the clash. Mr. Nam said that by mid-November his agents were already reporting that Mr. Jang had been detained. The Dec. 12 verdict noted that Mr. Jang “instructed his stooges to sell coal and other precious underground resources at random.”

Mr. Nam said the fact that such behind-the-scenes tensions had spun so far out of control that Mr. Kim had to order his own uncle’s execution raised questions about the government’s internal unity.

“The fissure within the regime could accelerate if it further loses popular support,” the lawmakers quoted Mr. Nam as saying.

New Focus International has published three articles on the Jang affair. These articles take a different approach than the articles above. These look at Pyongyang’s the de facto political culture and competition between JST and the party’s Organization and Guidance Department. You can read them here:

1. The transformation of N.Korean politics through the execution of Jang Song-thaek

2. Purge and execution of Jang Song-thaek: The transformation of N.Korean political procedure

3. Kim Jong-un is not in charge. Then who is?

4. We have just witnessed a coup in North Korea

5. This is it: North Korea’s hidden power system

Here is coverage at the Wall Street Journal’s Korea Real Time.

UPDATE 15 (2013-12-20): The Daily NK reports that Jang’s family members have been rounded up and punished.

UPDATE 14 (2013-12-6): Jang’s purge has had impact on operations at Rason Economic and Trade Zone and Hwanggumphyong SEZ.

UPDATE 13 (2013-12-17): NK News reports that  articles about Jang song-thaek have been deleted from the KCNA.kp web page (thought not the KCNA.co.jp site). According to the article:

In total, 10-15 articles on Jang were deleted, with approximately 500 other articles mentioning Jang’s name edited to remove Jang’s name specifically.

“The scale of what they’re attempting to do here is unprecedented. North Korea ‘s websites are somewhat of an unknown quantity, and nothing on this scale has been detected before,” said Frank Feinstein, a New Zealand based computing specialist that tracks North Korean media output for NK News’s KCNA Watch.

“They’re attempting to write not just Jang, but several other elites, right out of the history books,” Feinstein added.

UPDATE 12 (2013-12-16): James Person at the Wilson Center’s NKIDB writes about the DPRK’s last major purge in the 1960s.

UPDATE 11 (2013-12-15):  Michael Madden has written a thorough obituary for Jang Song-thaek.

UPDATE 10 (2013-12-15): KCNA lists Kim Kyong-hui on the funeral committee for Kim Kuk-thae, indicating she has survived the purge of her husband.

UPDATE 9 (2013-12-13): 38 North has published three prespectives on Jang’s execution: Haksoon Paik, James Church, Alexandre Mansourov

UPDATE 8 (2013-12-12): NK News has thoughts on Jang’s execution from David Straub, Victor Cha, Andrei Lankov, and Sunny Lee.

UPDATE 7 (2013-12-12): Rodong Sinmun has coverage (in Korean). Here are two images that were published of the tribunal that sentenced Mr. Jang:

jang-tribunal

 

jang-tribunal-2

Top: The three-member military tribunal of the Ministry of State Security. Bottom: Jang can be seen in handcuffs as he is escorted by two guards from the Ministry of State Security.

UPDATE 6 (2013-12-12): KCNA announces execution of Jang song-thaek:

Traitor Jang Song Thaek Executed

Pyongyang, December 13 (KCNA) — Upon hearing the report on the enlarged meeting of the Political Bureau of the Central Committee of the Workers’ Party of Korea, the service personnel and people throughout the country broke into angry shouts that a stern judgment of the revolution should be meted out to the anti-party, counter-revolutionary factional elements. Against the backdrop of these shouts rocking the country, a special military tribunal of the DPRK Ministry of State Security was held on December 12 against traitor for all ages Jang Song Thaek.

The accused Jang brought together undesirable forces and formed a faction as the boss of a modern day factional group for a long time and thus committed such hideous crime as attempting to overthrow the state by all sorts of intrigues and despicable methods with a wild ambition to grab the supreme power of our party and state.

The tribunal examined Jang’s crimes.

All the crimes committed by the accused were proved in the course of hearing and were admitted by him.

A decision of the special military tribunal of the Ministry of State Security of the DPRK was read out at the trial.

Every sentence of the decision served as sledge-hammer blow brought down by our angry service personnel and people on the head of Jang, an anti-party, counter-revolutionary factional element and despicable political careerist and trickster.

The accused is a traitor to the nation for all ages who perpetrated anti-party, counter-revolutionary factional acts in a bid to overthrow the leadership of our party and state and the socialist system.

Jang was appointed to responsible posts of the party and state thanks to the deep political trust of President Kim Il Sung and leader Kim Jong Il and received benevolence from them more than any others from long ago.

He held higher posts than before and received deeper trust from supreme leader Kim Jong Un, in particular.

The political trust and benevolence shown by the peerlessly great men of Mt. Paektu were something he hardly deserved.

It is an elementary obligation of a human being to repay trust with sense of obligation and benevolence with loyalty.

However, despicable human scum Jang, who was worse than a dog, perpetrated thrice-cursed acts of treachery in betrayal of such profound trust and warmest paternal love shown by the party and the leader for him.

From long ago, Jang had a dirty political ambition. He dared not raise his head when Kim Il Sung and Kim Jong Il were alive. But, reading their faces, Jang had an axe to grind and involved himself in double-dealing. He began revealing his true colors, thinking that it was just the time for him to realize his wild ambition in the period of historic turn when the generation of the revolution was replaced.

Jang committed such an unpardonable thrice-cursed treason as overtly and covertly standing in the way of settling the issue of succession to the leadership with an axe to grind when a very important issue was under discussion to hold respected Kim Jong Un in high esteem as the only successor to Kim Jong Il in reflection of the unanimous desire and will of the entire party and army and all people.

When his cunning move proved futile and the decision that Kim Jong Un was elected vice-chairman of the Central Military Commission of the Workers’ Party of Korea at the Third Conference of the WPK in reflection of the unanimous will of all party members, service personnel and people was proclaimed, making all participants break into enthusiastic cheers that shook the conference hall, he behaved so arrogantly and insolently as unwillingly standing up from his seat and half-heartedly clapping, touching off towering resentment of our service personnel and people.

Jang confessed that he behaved so at that time as a knee-jerk reaction as he thought that if Kim Jong Un’s base and system for leading the army were consolidated, this would lay a stumbling block in the way of grabbing the power of the party and state.

When Kim Jong Il passed away so suddenly and untimely to our sorrow, he began working in real earnest to realize its long-cherished greed for power.

Abusing the honor of often accompanying Kim Jong Unduring his field guidance, Jang tried hard to create illusion about him by projecting himself internally and externally as a special being on a par with the headquarters of the revolution.

In a bid to rally a group of reactionaries to be used by him for toppling the leadership of the party and state, he let the undesirable and alien elements including those who had been dismissed and relieved of their posts after being severely punished for disobeying the instructions of Kim Jong Il and kowtowing to him work in a department of the Central Committee of the WPK and organs under it in a crafty manner.

Jang did serious harm to the youth movement in our country, being part of the group of renegades and traitors in the field of youth work bribed by enemies. Even after they were disclosed and purged by the resolute measure of the party, he patronized those cat’s paws and let them hold important posts of the party and state.

He had let Ri Ryong Ha, flatterer, work with him since the 1980s whenever he was transferred to other posts and systematically promoted Ri up to the post of first vice department director of the Party Central Committee though he had been purged for his factional act of denying the unitary leadership of the party. Jang thus made Ri his trusted stooge.

Jang let his confidants and flatterers who had been fired for causing an important case of denying the unitary leadership of the party work in his department and organs under it in a crafty manner in a few years. He systematically rallied ex-convicts, those problematic in their past careers and discontented elements around him and ruled over them as sacred and inviolable being.

He worked hard to put all affairs of the country under his control, massively increasing the staff of his department and organs under it, and stretch his tentacles to ministries and national institutions. He converted his department into a “little kingdom” which no one dares touch.

He was so imprudent as to prevent the Taedonggang Tile Factory from erecting a mosaic depicting Kim Il Sung and Kim Jong Iland a monument to field guidance given by them. Moreover, Jang turned down the unanimous request of the service personnel of a unit of the Korean People’s Internal Security Forces to have the autograph letter sent by Kim Jong Un to the unit carved on a natural granite and erected with good care in front of the building of its command. He was so reckless as to instruct the unit to erect it in a shaded corner.

He committed such anti-party acts as systematically denying the party line and policies, its organizational will, in the past period. These acts were a revelation of deliberate and sinister attempt to create extreme illusion and idolization of him by making him appear as a special being who can overrule either issues decided by the party or its line.

He went so rude as to take in the middle even those things associated with intense loyalty and sincerity of our army and people towards the party and the leader and distribute them among his confidants in an effort to take credit upon himself for doing so. This behavior was to create illusion about him.

Due to his persistent moves to create illusion and idolization of him his flatterers and followers in his department and organs under it praised him as “No. 1 comrade.” They went the lengths of denying even the party’s instructions to please him at any cost.

Jang established such a heterogenous work system in the department and the relevant organs as considering what he said as more important than the party’s policies. Consequently, his trusted henchmen and followers made no scruple of perpetrating such counterrevolutionary act as disobeying the order of the Supreme Commander of the KPA.

The revolutionary army will never pardon all those who disobey the order of the Supreme Commander and there will be no place for them to be buried even after their death.

Dreaming a fantastic dream to become premier at an initial stage to grab the supreme power of the party and state, Jang made his department put major economic fields of the country under its control in a bid to disable the Cabinet. In this way he schemed to drive the economy of the country and people’s living into an uncontrollable catastrophe.

He put inspection and supervision organs belonging to the Cabinet under his control in defiance of the new state machinery established by Kim Jong Il at the First Session of the Tenth Supreme People’s Assembly. He put all issues related to all structural works handled by the Cabinet under his control and had the final say on them, making it impossible for the Cabinet to properly perform its function and role as an economic command. They included the issues of setting up and disorganizing committees, ministries and national institutions and provincial, city and county-level organs, organizing units for foreign trade and earning foreign money and structures overseas and fixing living allowances.

When he attempted to make a false report to the party without having agreement with the Cabinet and the relevant ministry on the issue related to the state construction control organization, officials concerned expressed just opinion that his behavior was contrary to the construction law worked out by Kim Il Sung andKim Jong Il. Hearing this, he made the reckless remark that “the rewriting of the construction law would solve the problem.”

Abusing his authority, he undermined the work system related to the construction of the capital city established by Kim Il Sungand Kim Jong Il, reducing the construction building-materials bases to such bad shape little short of debris in a few years. He weakened the ranks of technicians and skilled workers at the unit for the construction of the capital city in a crafty manner and transferred major construction units to his confidants so that they might make money. In this way he deliberately disturbed the construction in Pyongyang.

He instructed his stooges to sell coal and other precious underground resources at random. Consequently, his confidants were saddled with huge debts, deceived by brokers. Jang made no scruple of committing such act of treachery in May last as selling off the land of the Rason economic and trade zone to a foreign country for a period of five decades under the pretext of paying those debts.

It was none other than Jang who wirepulled behind scene Pak Nam Gi, traitor for all ages, to recklessly issue hundreds of billions of won in 2009, sparking off serious economic chaos and disturbing the people’s mind-set.

Jang encouraged money-making under various pretexts to secure funds necessary for gratifying his political greed and was engrossed in irregularities and corruption. He thus took the lead in spreading indolent, careless and undisciplined virus in our society.

After collecting precious metals since the construction of Kwangbok Street in the 1980s, he set up a secret organ under his control and took a fabulous amount of funds from a bank and purchased precious metals in disregard of the state law. He thus committed such anti-state criminal acts as creating a great confusion in financial management system of the state.

He let the decadent capitalist lifestyle find its way to our society by distributing all sorts of pornographic pictures among his confidants since 2009. He led a dissolute, depraved life, squandering money wherever he went.

He took at least 4.6 million Euro from his secret coffers and squandered it in 2009 alone and enjoyed himself in casino in a foreign country. These facts alone clearly show how corrupt and degenerate he was.

Jang was so reckless with his greed for power that he persistently worked to stretch his tentacles even to the People’s Army with a foolish calculation that he would succeed in staging a coup if he mobilized the army.

He fully revealed his despicable true colors as a traitor for all ages in the course of questioning by uttering as follows: “I attempted to trigger off discontent among service personnel and people when the present regime does not take any measure despite the fact that the economy of the country and people’s living are driven into catastrophe. Comrade supreme leader is the target of the coup.”

As regards the means and methods for staging the coup, Jang said: “I was going to stage the coup by using army officers who had close ties with me or by mobilizing armed forces under the control of my confidants. I don’t know well about recently appointed army officers but have some acquaintances with those appointed in the past period. I thought the army might join in the coup if the living of the people and service personnel further deteriorate in the future. And I calculated that my confidants in my department including Ri Ryong Ha and Jang Su Gil would surely follow me and had a plan to use the one in charge of the people’s security organ as my confidant. It was my calculation that I might use several others besides them.”

Asked about the timing of the coup and his plan to do after staging the coup, Jang answered: “I didn’t fix the definite time for the coup. But it was my intention to concentrate my department and all economic organs on the Cabinet and become premier when the economy goes totally bankrupt and the state is on the verge of collapse in a certain period. I thought that if I solve the problem of people’s living at a certain level by spending an enormous amount of funds I have accumulated under various names after becoming premier, the people and service personnel will shout “hurrah” for me and I will succeed in the coup in a smooth way.”

Jang dreamed such a foolish dream that once he seizes power by a base method, his despicable true colors as “reformist” known to the outside world would help his “new government” get “recognized” by foreign countries in a short span of time.

All facts go to clearly prove that Jang is a thrice-cursed traitor without an equal in the world as he had desperately worked for years to destabilize and bring down the DPRK and grab the supreme power of the party and state by employing all the most cunning and sinister means and methods, pursuant to the “strategic patience” policy and “waiting strategy” of the U.S. and the south Korean puppet group of traitors.

The hateful and despicable nature of the anti-party, anti-state and unpopular crimes committed by Jang was fully disclosed in the course of the trial conducted at the special military tribunal of the DPRK Ministry of State Security.

The era and history will eternally record and never forget the shuddering crimes committed by Jang Song Thaek, the enemy of the party, revolution and people and heinous traitor to the nation.

No matter how much water flows under the bridge and no matter how frequently a generation is replaced by new one, the lineage of Paektu will remain unchanged and irreplaceable.

Our party, state, army and people do not know anyone exceptKim Il Sung, Kim Jong Il and Kim Jong Un.

Our service personnel and people will never pardon all those who dare disobey the unitary leadership of Kim Jong Un, challenge his absolute authority and oppose the lineage of Paektu to an individual but bring them to the stern court of history without fail and mercilessly punish them on behalf of the party and revolution, the country and its people, no matter where they are in hiding.

The special military tribunal of the Ministry of State Security of the DPRK confirmed that the state subversion attempted by the accused Jang with an aim to overthrow the people’s power of the DPRK by ideologically aligning himself with enemies is a crime punishable by Article 60 of the DPRK Criminal Code, vehemently condemned him as a wicked political careerist, trickster and traitor for all ages in the name of the revolution and the people and ruled that he would be sentenced to death according to it.

The decision was immediately executed.

You can never clap too loud or too long…

See more NK News here and here.

UPDATE 5 (2013-12-12): Here is Ruediger Frank in 38 North.

UPDATE 4 (2013-12-11): Rodong Sinmun followed up with this article the next day:

An order of the respected Supreme Commander is what our army should carry out at the risk of its life.

It has been invariable faith and will of our revolutionary army at all times — in the days when it had to smash armed provocations of the U.S. and its satellites and in the days when it has been engaged  in both socialist construction and national defense.

Our revolutionary arms has always been merciless at all its enemies, particularly those who attempted to do harm to the headquarters of our revolution; those who refused to obey the order of the Supreme Commander and those who dreamed different dreams while in the same bed.

Jang Song Thaek and a handful of his followers dared to challenge our Party policies and disobeyed the orders of our Supreme Commander. Their crimes have been exposed now. This angered men and officers of our People’s Army.

Roaring voices now come from all corners of the country, “Our rifle never wavers. Hand those betrayers to us. We will finish them off, leaving no traces of their dirty bodies.”

The anti-Party, counter-revolutionary, factional crimes of Jang Song Thaek and his villains make us more keenly alive to the mission of the revolutionary army.

The first target we are going to crush is those who want to haggle about our Party’s line and directions, make a mess of the Party leadership exploits, keep away from the Party and class principles, and those who try to turn the pure minds of our people to rotten fish.

Our revolutionary army knows no one but its respected Supreme Commander Kim Jong Un.

UPDATE 3 (2013-12-10): Rodong Sinmun offers the following summary of the meeting:

Let Us Unite Firm around Kim Jong Un To

Accomplish Revolutionary Cause of Juche

Now our army and people have united firmer than ever before around the Workers’ Party of Korea.

An enlarged meeting of the Political Bureau of the Central Committee of the WPK was held under the guidance of the respected Marshal Kim Jong Un. It was a historic landmark meeting in strengthening our party and accomplishing the revolutionary cause of Juche in our country.

The meeting laid bare the anti-party, counter-revolutionary, factional acts of Jang Song Thaek and his group who opposed the monolithic system of the party leadership.

Our party removed Jang from the Party and purged the party ranks of his group, thus giving a telling blow to the factionalists.

Our army and people welcomed the resolution of the meeting and reaffirmed their conviction to go along the road of final victory under the leadership of the party, holding high the banner of Kimilsungism-Kimjongilism.

The enlarged meeting is of weighty significance in further consolidating the organizational and ideological unity of the party centered on Kim Jong Un.

It will also go a long way towards cementing the single-minded unity of our party and revolutionary ranks.

The meeting also marked an important turn in our efforts to build a thriving nation.

All the Party members, men of the People’s Army and people should learn to know the significance and importance of the meeting and unite them closer around the great party and continue to march vigorously for final victory of revolution.

They must always remain true to Kim Jong Un’s idea and lines and to his leadership. And in this, officials must take the lead.

Complacence and concession are taboo in ideological work because they may leave a margin for any unsound idea to make an inroad and decay sound minds.

The Party organizations of all levels must work to prepare every member of the party and of the working people as one ready to share weal and woe with the respected Marshal.

Let all of us more firmly unite around Kim Jong Un and continue our onward march with full vigor to realize the idea and cause of the great generalissimos.

UPDATE 2 (2013-12-9): Martyn Williams is the first in the Western Hemisphere to get the TV footage:

Michael Madden has some of the names and relationships from the video outlined here.

UPDATE 1 (2013-12-9): Andrei Lankov offers analysis at NK News. Alexandre Mansourov offers additional information at 38 North.

ORIGINAL POST (2013-12-9): According to KCNA (2013-12-9):

Jang-ST-Arrested

Pictured above (Yonhap, KCTV): Jang being removed from Politburo meeting. Jean Lee notes that Jang was sitting in the audience. He was not up on the stage with other members of the leadership.

Report on Enlarged Meeting of Political Bureau of Central Committee of WPK

Pyongyang, December 9 (KCNA) — A report on the enlarged meeting of the Political Bureau of the Central Committee of the Workers’ Party of Korea (WPK) was released on December 8.

The following is the full text of the report:

An enlarged meeting of the Political Bureau of the Central Committee of the WPK was held in Pyongyang, the capital of the revolution, on Dec. 8.

Respected Comrade Kim Jong Un, first secretary of the WPK, guided the meeting.

Present there were members and alternate members of the Political Bureau of the Central Committee of the WPK.

Leading officials of the Central Committee of the WPK, provincial party committees and armed forces organs attended it as observers.

Our party members, service personnel and all other people have made energetic efforts to implement the behests of leader Kim Jong Il, entrusting their destiny entirely to Kim Jong Un and getting united close around the Central Committee of the WPK since the demise of Kim Jong Il, the greatest loss to the nation.

In this historic period for carrying forward the revolutionary cause of Juche the chance elements and alien elements who had made their ways into the party committed such anti-party, counter-revolutionary factional acts as expanding their forces through factional moves and daring challenge the party, while attempting to undermine the unitary leadership of the party.

In this connection, the Political Bureau of the C.C., the WPK convened its enlarged meeting and discussed the issue related to the anti-party, counter-revolutionary factional acts committed by Jang Song Thaek.

The meeting, to begin with, fully laid bare the anti-party, counter-revolutionary factional acts of Jang Song Thaek and their harmfulness and reactionary nature.

It is the immutable truth proved by the nearly 70-year-long history of the WPK that the party can preserve its revolutionary nature as the party of the leader and fulfill its historic mission only when it firmly ensures its unity and cohesion based on the monolithic idea and the unitary center of leadership.

The entire party, whole army and all people are dynamically advancing toward the final victory in the drive for the building of a thriving nation, meeting all challenges of history and resolutely foiling the desperate moves of the enemies of the revolution under the leadership of Kim Jong Un. Such situation urgently calls for consolidating as firm as a rock the single-minded unity of the party and the revolutionary ranks with Kim Jong Un as its unitary centre and more thoroughly establishing the monolithic leadership system of the party throughout the party and society.

The Jang Song Thaek group, however, committed such anti-party, counter-revolutionary factional acts as gnawing at the unity and cohesion of the party and disturbing the work for establishing the party unitary leadership system and perpetrated such ant-state, unpopular crimes as doing enormous harm to the efforts to build a thriving nation and improve the standard of people’s living.

Jang pretended to uphold the party and leader but was engrossed in such factional acts as dreaming different dreams and involving himself in double-dealing behind the scene.

Though he held responsible posts of the party and state thanks to the deep political trust of the party and leader, he committed such perfidious acts as shunning and obstructing in every way the work for holding President Kim Il Sung and Kim Jong Il in high esteem for all ages, behaving against the elementary sense of moral obligation and conscience as a human being.

Jang desperately worked to form a faction within the party by creating illusion about him and winning those weak in faith and flatterers to his side.

Prompted by his politically-motivated ambition, he tried to increase his force and build his base for realizing it by implanting those who had been punished for their serious wrongs in the past period into ranks of officials of departments of the party central committee and units under them.

Jang and his followers did not sincerely accept the line and policies of the party, the organizational will of the WPK, but deliberately neglected their implementation, distorted them and openly played down the policies of the party. In the end, they made no scruple of perpetrating such counter-revolutionary acts as disobeying the order issued by the supreme commander of the Korean People’s Army.

The Jang group weakened the party’s guidance over judicial, prosecution and people’s security bodies, bringing very harmful consequences to the work for protecting the social system, policies and people.

Such acts are nothing but counter-revolutionary, unpopular criminal acts of giving up the class struggle and paralyzing the function of popular democratic dictatorship, yielding to the offensive of the hostile forces to stifle the DPRK.

Jang seriously obstructed the nation’s economic affairs and the improvement of the standard of people’s living in violation of the pivot-to-the-Cabinet principle and the Cabinet responsibility principle laid down by the WPK.

The Jang group put under its control the fields and units which play an important role in the nation’s economic development and the improvement of people’s living in a crafty manner, making it impossible for the economic guidance organs including the Cabinet to perform their roles.

By throwing the state financial management system into confusion and committing such act of treachery as selling off precious resources of the country at cheap prices, the group made it impossible to carry out the behests of Kim Il Sung and Kim Jong Il on developing the industries of Juche iron, Juche fertilizer and Juche vinalon.

Affected by the capitalist way of living, Jang committed irregularities and corruption and led a dissolute and depraved life.

By abusing his power, he was engrossed in irregularities and corruption, had improper relations with several women and was wined and dined at back parlors of deluxe restaurants.

Ideologically sick and extremely idle and easy-going, he used drugs and squandered foreign currency at casinos while he was receiving medical treatment in a foreign country under the care of the party.

Jang and his followers committed criminal acts baffling imagination and they did tremendous harm to our party and revolution.

The ungrateful criminal acts perpetrated by the group of Jang Song Thaek are lashing our party members, service personnel of the People’s Army and people into great fury as it committed such crimes before they observed two-year mourning for Kim Jong Il, eternal general secretary of the WPK.

Speeches were made at the enlarged meeting.

Speakers bitterly criticized in unison the anti-party, counter-revolutionary factional acts committed by the Jang group and expressed their firm resolution to remain true to the idea and leadership of Kim Jong Un and devotedly defend the Party Central Committee politically and ideologically and with lives.

The meeting adopted a decision of the Political Bureau of the Party Central Committee on relieving Jang of all posts, depriving him of all titles and expelling him and removing his name from the WPK.

The party served warning to Jang several times and dealt blows at him, watching his group’s anti-party, counter-revolutionary factional acts as it has been aware of them from long ago. But it did not pay heed to it but went beyond tolerance limit. That was why the party eliminated Jang and purged his group, unable to remain an onlooker to its acts any longer, dealing telling blows at sectarian acts manifested within the party.

Our party will never pardon anyone challenging its leadership and infringing upon the interests of the state and people in violation of the principle of the revolution, regardless of his or her position and merits.

No matter how mischievously a tiny handful of anti-party, counter-revolutionary factional elements may work, they can never shake the revolutionary faith of all party members, service personnel and people holding Kim Jong Un in high esteem as the unitary centre of unity and unitary centre of leadership.

The discovery and purge of the Jang group, a modern day faction and undesirable elements who happened to worm their ways into our party ranks, made our party and revolutionary ranks purer and helped consolidate our single-minded unity remarkably and advance more dynamically the revolutionary cause of Juche along the road of victory.

No force on earth can deter our party, army and people from dynamically advancing toward a final victory, single-mindedly united around Kim Jong Un under the uplifted banner of great Kimilsungism-Kimjongilism.

Though the report notes that many of Jang’s associates have been purged, Yonhap notes that the DPRK ambassador to China, one of Jang’s associates, is conducting business as usual.

The North Korean ambassador to China, considered one of the close aides to the purged uncle of the North’s leader Kim Jong-un, appears to be conducting “business as usual for now,” a Seoul diplomatic source said Monday, on the same day that Pyongyang confirmed the powerful uncle had been sacked from office.

The North Korean ambassador, Ji Jae-ryong, has shared the same political fate as the purged uncle, Jang Song-thaek, over the past three decades, and served as a “linking pin” between Jang and the Chinese leadership since he took up the post in 2010, the source said.

“So far, we have detected no unusual movements at the North Korean embassy in Beijing,” the source said on the condition of anonymity.

“It has also been business as usual for Ambassador Ji Jae-ryong and other North Korean diplomats,” the source said.

The same article notes that some of Jang’s relatives in Malaysia were recalled.

Last week, an intelligence source in Beijing said that the North Korean ambassador to Malaysia, Jang Yong-chol, who is a nephew of Jang, was believed to have been recalled home.

The wife and two 20-something sons of the North Korean ambassador to Malaysia were also spotted last week before boarding an Air Koryo flight in China’s northeastern city of Shenyang, multiple witnesses said.

And in Cuba (Japan Times)…

North Korea’s ambassador to Cuba, Jon Yong Jin — the husband of Jang’s elder sister — has also been recalled, he said, according to a joint briefing by ruling and opposition party lawmakers.

Here is the report by Voice of [North] Korea:

See Madden’s post here. NK News has info here.

Here is coverage in major media outlets: New York Times, Bloomberg, Los Angeles Times, Wall Street Journal (and here), Associated Press.

Although it is still rumor at this point, some have speculated that Jang has been executed. The Ministry of Unification asserts he is “safe”. The JoongAng Daily reports he is in his Changgwang residence.

It is also rumored that one of Jang’s associates is under the protection of the South Korean government at a secret location in China  (see here and here). Two other associates, Ri Ryong-ha and Jang Su-gil, have allegedly been executed. Seoul denies they have anybody under their protection.

Mr. Jang’s removal was announced several days ago by the South Korean intelligence service.  According to the New York Times:

Mr. Jang’s apparent fall from power came after his two deputies at the administrative department of the ruling Workers’ Party of Korea were executed last month on charges of “corruption and anti-party activities,” according to South Korean lawmakers who were briefed by intelligence officials in a hurriedly scheduled meeting at the National Assembly in Seoul.

The intelligence agency did not reveal how it learned of the executions, the lawmakers said.

“I don’t think Jang’s deputies were executed for mere corruption. Rather, they were executed because they established a ‘power,’ ” said Cheong Seong-chang, a senior analyst at Sejong Institute in South Korea.

Mr. Jang would not be the first No. 2 or the first uncle of the North Korean leader to lose power. Kim Jong-il plotted a purge of his own powerful uncle to solidify control after the death of his father, the North’s founding president, Kim Il-sung.

In July last year, Kim Jong-un removed his then No. 2 man, Vice Marshal Ri Yong-ho.

Analysts said they suspected that Mr. Jang’s downfall may have been engineered by Kim Won-hong, who was made head of the nation’s secret police and spy agency in April last year, and Vice Marshal Choe Ryong-hae, who became the top political officer in the military under Mr. Kim. On Tuesday, the South Korean intelligence officials said North Korea’s secret police began investigating the corruption of Mr. Jang’s close allies this year.

Reuters offers great background info on Mr. Jang:

The man considered the power behind the throne in secretive North Koreais believed to be out of a job, thanks to his nephew and leader Kim Jong Un, and it wasn’t immediately clear if this time he can find the way back.

Jang Song Thaek survived purges and official displeasure to reach the pinnacle of his career, thanks largely to his sometimes tempestuous marriage to Kim Kyong Hui, the 67-year-old daughter of North Korea’s founder, Kim Il Sung.

The Pyongyang power couple formed a kind of regency in the obscurantist political world of the North behind Kim Jong Un, its young and mercurial leader, who succeeded his father, Kim Jong Il, in December 2011.

“The most important thing for Jang Song Thaek is he has institutional memory – he knows where all the bodies are buried and that’s critical in North Korea,” said Mike Madden, a North Korea expert and author of NK Leadership Watch blog.

“He knows who has a drinking problem, and whose wife likes to talk to her relatives a little too much.”

The couple’s reach was augmented by their control over the ruling Korean Workers’ Party’s secret funds that handle the Kim family’s finances both at home and abroad, according to An Chan Il, a former North Korean military officer who defected to the South and has become an expert on the North’s power elite.

After his dismissal in 2004, Jang, 67, was rehabilitated to stand at the peak of power as Vice Chairman of the National Defence Commission, the country’s top military body, and was a member of the ruling Workers’ Party Politburo.

He has likely been sacked from both posts, according to South Korean lawmaker Jung Cheong-rae, who on Tuesday cited a senior South Korean official with the National Intelligence Service (NIS).

“Jang is both the greatest benefactor and the greatest threat (to Kim Jong Un)”, said Park Hyeong-jung at the state-run Korea Institute of National Unification in Seoul back in April.

Jang met Kim Kyong Hui when they were students at Kim Il Sung University. He had good looks and charm, was popular and outgoing, known more for partying and deftness with the accordion than his academic achievements, according to Hwang Jang-yop, a former Workers’ Party secretary and defector who was head of the school at the time.

PARTIES AND WOMEN

His humble background made Jang a less than ideal suitor for the headstrong daughter of North Korea’s founder. Yet Kim Kyong Hui did not let her father’s objections stop her from marrying – with the help of her brother, according to Jang Jin Song, a North Korean defector who previously worked at the Workers’ Party United Front Department, a propaganda unit tasked with destabilising South Korea.

The marriage was not a happy one, he said. As Jang Song Thaek started rising through the ranks of the Workers’ Party, he became less attentive to his family. It was an open secret that he partied hard and womanised, said defectors in Seoul and South Korean politicians who met Jang on a 2002 visit as part of an economic delegation touring the South’s industrial successes.

Their daughter, Kum-song, died in an apparent suicide while attending school in France, ironically because her parents objected to her boyfriend, according to Jang Jin Song.

Kim Kyong Hui herself had an affair with a young pianist who taught her daughter, according to Jang Jin Song, who recalled that a classmate of his at the Pyongyang University of Music and Dance had been a rival for Kim’s affections. The piano teacher, a former child prodigy and household name, and who was 10 years younger than his paramour, would soon disappear.

Kim Kyong Hui would be told he had committed suicide. But Jang the defector said Kim knew her husband had had her lover killed, one of a vast number of people to fall victim to a reign of terror Jang Song Thaek orchestrated in the late 1990s.

Before he became the power behind the throne under Kim Jong Un, Jang was ejected from the elite in 2004 for angering Kim Jong Il by hosting lavish parties, according to media reports and assessments by South Korean think-tanks.

Two years later, he was back, and in 2011 was widely credited with orchestrating the ouster of Army chief of staff Ri Yong Ho, a major rival who had been a loyal aide to the father of Pyongyang’s current leader.

Jang’s removal, if final, could mean Kim Jong Un has lost perhaps the strongest benefactor he could have to help his transformation into a ruler of the calibre of his predecessors, a factor that leaves the question of his future return open.

“Jang’s a big potato to get rid of,” said Madden of NK Leadership Watch. “They can’t get rid of him completely. If they do, they’re in trouble because this is the guy you do not want going to a foreign country.

“… Jang is basically a Kim Jong Il figure. Kim Jong Un does not have the intellectual capacity to do what his father did. His father was really in touch with a lot of things that Kim Jong Un is not.”

See also this article by Aiden Foster-Carter in the Wall Street Journal’s Korea Real Time.

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Largest known rare earth deposit discovered in DPRK

Thursday, December 5th, 2013

2013-12-Jongju

Pictured above (Google Earth): Jongju County

According to Mining.com:

Privately-held SRE Minerals on Wednesday announced the discovery in North Korea of what is believed to be the largest deposit of rare earth elements anywhere in the world.

SRE also signed a joint venture agreement with the Korea Natural Resources Trading Corporation for rights to develop REE deposits at Jongju in the Democratic People’s Republic of Korea for the next 25 years with a further renewal period of 25 years.

The joint venture company known as Pacific Century Rare Earth Mineral Limited, based in the British Virgin Islands, has also been granted permission for a processing plant on site at Jongju, situated approximately 150 km north-northwest of the capital of Pyongyang.

The initial assessment of the Jongju target indicates a total mineralisation potential of 6 billion tonnes with total 216.2 million tonnes rare-earth-oxides including light REEs such as lanthanum, cerium and praseodymium; mainly britholite and associated rare earth minerals. Approximately 2.66% of the 216.2 million tonnes consists of more valuable heavy rare-earth-elements.

According Dr Louis Schurmann, Fellow of the Australasian Institute of Mining and Metallurgy and lead scientist on the project, the Jongju deposit is the world’s largest known REE occurrence.

The 216 million tonne Jongju deposit, theoretically worth trillions of dollars, would more than double the current global known resource of REE oxides which according to the US Geological Survey is pegged at 110 million tonnes.

Minerals like fluorite, apatite, zircon, nepheline, feldspar, and ilmenite are seen as potential by-products to the mining and recovery of REE at Jongju.

Further exploration is planned for March 2014, which will includes 96,000m (Phase 1) and 120,000m (Phase 2) of core drilling, with results reported according to the Australia’s JORC Code, a standard for mineral disclosure similar to Canada’s widely used National Instrument 43-101.

Also from Mining Weekly:

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

Here is coverage in Voice of America,  Time, The Diplomat.

Read the full story here:
Largest known rare earth deposit discovered in North Korea
Mining.com
Frik Els
2013-12-5

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Hao Ze’s investment in the DPRK

Monday, November 18th, 2013

This article contains a wealth on information on Chinese investment and financial support of the DPRK.

According to the South China Morning Post:

On his ninth business trip to North Korea this year, Hao Ze has been meeting government officials to finalise his latest investment deal, providing equipment to mine rutile, an ingredient in paints, plastics and sunscreen.

The work at the mineral ore deposit will add to Hao’s growing business empire, which includes a plant manufacturing car parts, a restaurant and a spa – all investments in a country run by a reclusive dictatorship.

Hao is among a growing league of private Chinese investors lured by North Korea’s powerful business potential and undeterred by its unpredictable politics. The investments are fuelling growth in North Korea’s economy, as well as concerns among Western analysts that the boom could encourage more erratic behaviour by the hermit kingdom.

There, Chinese investors dominate certain business sectors – in particular, mining – and its one reason many analysts say that North Korea’s feeble economy appears to be improving.

Before 2011, North Korea had been running a deficit. Two prominent economists have estimated that the country enjoyed a small surplus over the last two years. Last year, the country’s gross domestic product grew by 1.3 per cent, according to Bank of South Korea. The bank did not provide any dollar figures.

Most of these business deals are private and sealed outside of the Chinese government’s control. The exact size of the investments could not be gleaned. But many of the arrangements are profitable and have inadvertently increased Pyongyang’s dependence on its closest ally, Beijing, even as China has shown apparent frustration with the nuclear ambitions of supreme leader Kim Jong-un.

The increase in North Korea’s wealth from the investments could also shift the country’s engagement, or lack of it, with the outside world. Some researchers fear that with more capital, North Korea’s nuclear ambitions might grow bolder. The country will also have less incentive to introduce economic changes. Other researchers express hope that foreign investment creates an opportunity for more fruitful engagement with the outside world and the international community.

Raised in the central province of Zhejiang , Hao’s interest in North Korea was piqued by his grandfather, who fought in the Korean war in the 1950s. The grandson started travelling to North Korea in 2004 with friends to distribute food and money. He cultivated contacts and resourceful middlemen, and relied on those people when, in 2010, he started to import North Korean ginseng and honey to China. His portfolio expanded steadily and now includes a variety of small businesses on the peninsula.

He and several Chinese partners have invested 10 million yuan (HK$12.6 million) in Pyongyang, where he employs about 150 local workers, built an 8,000-square-metre factory compound and runs a restaurant and spa.

“There certainly are risks,” Hao says. “But this place is just like China in the 1980s. It’s highly risky, but it’s also highly profitable if you seize the opportunity.”

The actual size of private Chinese investment in North Korea is hard to gauge. Chinese citizens had poured about US$6 billion into businesses in North Korea by 2011, according to Sheila Miyoshi Jager, an associate professor of East Asian studies at Oberlin College in the United States.

China’s non-financial foreign direct investment in North Korea had reached US$290 million by the end of 2010, according to China’s Ministry of Commerce, a figure included in a report last year by the newspaper Oriental Morning Post in Shanghai. Hao and other academics say the figure is growing as more Chinese investors with an appetite for risk venture into North Korea.

And risks there are. Last year, a rare open row between a Chinese company and the North Korean government drew international attention to Korea’s opaque rules and arbitrary decisions. Chinese fertiliser and mineral producer Xiyang Group said in an August 2012 blog post that, after it had spent four years and 240 million yuan on an iron ore enterprise, North Korean authorities suddenly cancelled the company’s contract last year. The company said it was cheated out of its mining assets after North Korean officials extorted more than US$800,000 from the Chinese firm.

Xiyang called its venture a “nightmare” and said estimates of their losses were US$55.3 million. North Korean state media denied the claims and said the company implemented just 50 per cent of its investment obligations. Beijing has stayed silent about the dispute.

The incident has not dampened the enthusiasm of Chinese investors. Hao says that private businessmen like him are lured by a large pool of cheap labour and lower operating costs. Despite an unstable electrical power supply, utility fees and taxes are much lower than in China.

Almost 90 per cent of the more than 300 Chinese investors surveyed in 2007 reported making a profit in North Korea despite problems such as asset theft and rampant corruption, according to a survey by Marcus Noland and Stephan Haggard, two economists at the Peterson Institute for International Economics in Washington.

“That’s partly because this place is so isolated and so underdeveloped that if you can avoid major problems, there is money to be made,” Noland says.

Hao made big profits in the manufacturing and service industries. Now he’s setting his sights on North Korea’s mining sector, an increasingly important component of the country’s economy that has otherwise been severed from international trade.

That’s partly because of sanctions imposed by the United Nations and Western countries. Hao intends to invest 36 million yuan in his rutile venture, working with a company from Qinghai , which Hao declines to name as the deal is not finalised.

Chinese investors dominate North Korea’s mining industry. According to the US Korea Institute at John Hopkins University in the US, 41 per cent of the 138 Chinese companies registered as doing business in North Korea in 2010 were involved in the mining industry.

However, Zhang Huizhi from Jilin University’s North East Research Centre says that many private Chinese investors are working in North Korea without registering with Chinese authorities.

It’s believed that North Korea has around 200 different minerals and US$6 trillion worth of rare elements and mineral deposits including magnetite, zinc, copper and limestone, according to estimates by the South Korean state-owned mining company Korea Resources.

However, many international investors are turned off by North Korea’s cryptic business environment, unstable politics and faulty infrastructure, which have made operating mines and transporting minerals difficult. Chinese businessmen, though, plough ahead thanks to their proximity, access to savvy Chinese middlemen who speak Korean and connections on both sides of the border. “These are the resources not available for other investors,” says Scott Bruce, an associate with the East West Centre in the United States.

Coal mining is a popular choice for Chinese businesses. According to Bruce, many Chinese investors pay far less for North Korean coal than for what’s extracted from other countries. North Korea, however, pays a premium for Chinese coal imports.

“The Chinese investors have to deal with huge risks to get in and out of the country. They often have to build infrastructure to access the minerals, so they are looking for their costs to reflect those risks,” Bruce says.

Since he inherited power in 2011, supreme leader Kim has pledged to revive the country’s economy. In October, Pyongyang announced a plan to establish 14 special economic zones to attract more foreign investment. Last year, the government began allowing North Koreans to work in China. But experts wonder whether Kim is committed to opening economic borders or if he will roll back the few existing reforms, as his father did, for fear of losing authority.

Recent visitors to North Korea do not dispute that the country’s economy may be improving.

“There are a lot more taxis on the road. More people are using cell phones. And you would be surprised to see that the restaurants are actually packed,” says Wu Wenxing, a Chinese businessman who has visited the country five times since last year.

No hard figures are available to indicate the country’s economic performance. But according to ongoing research by Noland and Haggard, the country is likely to have run a surplus in the past two years largely because of growing trade with China.

While analysts are still trying to explain the sudden growth in wealth, many see China’s economic presence, especially in the mining industry, as a major contributing factor. Despite Beijing’s support for the latest round of United Nations sanctions against North Korea, bilateral trade between the two nations hit a record high in the first eight months of this year.

Noland said a wealthier North Korea could mean that the country would be less vulnerable to international pressure.

Remco Breuker from Leiden University in the Netherlands agrees. He says that the international community could be forced to readjust how it engages with North Korea. More international investments, he argues, could prod the country to become a better international neighbour.

“For years it has been the premise of US policy towards the North that if you exert enough pressure, the country will collapse. But it’s not happening, and in fact the country is in the black,” Breuker says. “We have to realise North Korea is here to stay.”

North Korea’s parallel development of nuclear weapons would hamper its economic development, Noland says. Most of the nuclear and missile tests would be followed by UN sanctions, a key detractor for international investors.

Expanding the country’s mineral extraction might have an economic downside. Bruce from the East West Centre says it may convince North Korea that it’s better to sell its resources for short-term cash while delaying productive economic changes that would promote long-term growth.

Sunny Lee, a fellow with the Shorenstein Asia-Pacific Research Centre at Stanford University, says that Beijing would not mind a wealthier North Korea as long as it maintains a good relationship with Beijing.

“Given the economic sanctions from the US and its allies, Pyongyang’s economic dependence on China is bound to deepen,” Lee says.

For businessmen like Hao, all is well as long as business is good. “We are expecting to recoup all our investment next year,” he says.

Read the full story here:
Chinese businessmen seek profitable opportunities in North Korea
or Mining North Korean opportunities
South China Morning Post
Kristine Kwok
2013-11-18

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Recent DPRK wage increases / economic management changes

Wednesday, November 6th, 2013

UPDATE 3 (2013-11-14): North Korea accelerating economic reforms? Wages and prices to be self-regulated (IFES):

North Korea appears to be pushing for internal economic improvement measures. Chosun Sinbo, the pro-North Korean newspaper in Japan, released an article on November 6 that discussed various performance-enhancing management and operational changes that took place at the Pyongyang Essential Foodstuff Factory this year.

Chosun Sinbo referred to Kim Jong Un’s speech made last March at the plenary meeting of the Central Committee of the Workers’ Party about improving economic management and named the recent changes at the food factory as a pilot project for this purpose. The news article added that “There are studies to bring fundamental changes in economic management and specific measures are being made to turn this into a reality.”

The main systemic changes made at the Pyongyang Essential Foodstuff Factory were the increase in autonomy of the company and the enforcement of wage differential based on performance. Based on the principle of cost compensation, prices of products produced with raw materials at the factory may be freely adjusted after consulting with the state.

The news article further explained that “The principle of socialist distribution is a simple system of distributing as much as you earn and the cost of living is determined by labor productivity.”  It also reported that some of the employees’ wages increased. Such news is likely intended to advertise to the outside world about North Korea’s changing domestic economic policies.

The North Korean economic journal Kyongje Yongu has also been increasingly reporting on the principle of distribution based on economic performance. In the recent issue published on October 30, 2013 (issue No. 4), an article titled “The Principle Problem of Properly Implementing the Socialist Labor Wage System” criticized the equalization of product distribution as it decreases the enthusiasm of workers toward production: “The strength and life used during the process of labor must be compensated through the principle of earning the amount of your labor.” The article stressed that wages must increase with production and rationalized the need for such wage increase.

Chosun Sinbo and Kyongje Yongu articles reveal the long-term efforts by the North Korean government in enhancing research about economic improvement measures and expanding projects in various factories, companies, and cooperative farms to implement these measures.

Recently, North Korea launched the State Economic Development Commission and organized a number of international forums on special economic zones.  These can be construed as possible signals toward economic reform, as North Korea continues to make various changes in its internal economic policies.

UPDATE 2 (2013-11-7): Another story of note in the Daily NK ties factory wage increases to the ability of enterprises to negotiate prices with the state:

Choson Sinbo, the regular publication of the pro-North Korea General Association of Korean Residents in Japan (Chongryon), has published news of a Pyongyang-based food factory being used as a testing ground for independent economic management. The enterprise fixes prices semi-independently in discussion with the state and pays increased wages, the piece, published yesterday, explained.

The publication conveyed, “Pyongyang Essential Foodstuff Factory became a test unit and conducted research in order to enact changes to overall economic management. They are currently implementing these.”

It continued, “Of particular note is the organization of production and economic management based on cost compensation principles and the socialist rules of division. Pyongyang Essential Foodstuff Factory has enacted the measures for themselves and prepared the collateral to allow for expansion and reproduction.”

“This factory has shed the state planning model and sources its own materials, and in discussion with the state it has been able to set its own prices as it sees fit. There is also a measure currently being adopted that provides monthly allowances in consideration of the labor of the employees,” it further emphasized.

However, a high-ranking defector was skeptical when asked about the piece, telling Daily NK, “These factories produce things like soybean paste, soy sauce, salt and side dishes. They have always played the role of distributor to the people, so there is no way that they would be able to just set prices how they wish on these products. It’s likely that the measures focus on work teams making apple and pear beverages, liquor and beer; things that do not relate to improving the lives of the people.”

UPDATE 1 (2013-11-7): The Daily NK follows up on the DPRK’s strategy to bring official wages in line with the price level:

North Korea’s decision to drastically increase the wages of workers in parts of the heavy industrial sector is designed to boost morale and improve productivity, the better to expand the country’s capacity to generate foreign currency income from investments in the exploitation of its mineral resources.

As exclusively reported yesterday by Daily NK, major industrial concerns in North Hamkyung Province such as Kim Chaek Iron and Steel Complex have raised wages by a factor of approximately one hundred, from a derisory 3,000 won per month, around half the market price of a kilo of rice, to 300,000 won. Thus far, 100,000 won of the total has been paid in cash and the remainder in kind in an attempt to head off the very real danger of dramatic price inflation that would result from 100% cash payments.

That such a substantial wage rise was only deemed feasible in enterprises with the potential to export primary or secondary resources for foreign exchange should not come as a surprise. Smaller domestic enterprises don’t have the liquid resources to take such a step. As with the Kaesong Industrial Complex, wages in cash and kind have always been more generous for workers in joint venture enterprises than elsewhere. The latest move reflects an extension of that reality.

At this early stage, experts believe that the measure is designed to create a business model for North Korea not unlike that on show at Kaesong, under which each province can improve its economic performance and attract greater quantities of foreign capital. By actively nurturing those rare businesses that are competitive in the regional environment, the country hopes to raise productivity overall.

A researcher with Industrial Bank of Korea, Cho Bong Hyun told Daily NK, “Raising salaries for enterprises in the minerals sector looks like an inevitable choice, since productivity couldn’t have been expected from light industrial enterprises when the operational level of most of those factories is so low.

Cho continued, “The Kim Jong Eun regime, which is currently concentrating on producing results in the economic sphere, made this decision based on the fact that for some time it has been earning foreign currency quite easily by exporting its mineral resources. They also hope that by raising salaries they can induce greater productive effort, since workers have not wanted to work properly since the public distribution system collapsed [in the 1990s].”

Yoon Deok Ryong, a senior research fellow with the Korea Institute for International Economic Policy added, “Kim Jong Eun has granted this autonomy to firms and raised wages in order to earn foreign currency and firm up his system. He wants to right the economy by discriminating in favor of businesses that are somewhat competitive.”

However, despite cautious enthusiasm for the latest step, the two experts cautioned that unless North Korea moves further in the direction of a market economic system, the measure might not prove effective.

Cho explained, “No matter how tightly the North Korean authorities seek to control economic activity, they will find it almost impossible to stop these wage rises inciting inflation and causing the value of the North Korean Won to nosedive even more. There is also the danger of conflict with between military and Party-Cabinet elements over the management of mineral resource enterprises that can be used to produce military goods.”

Yoon added that workers in enterprises excluded from the latest wage rises will not see the bigger economic picture, and will simply be aggrieved at there being no improvement in their own conditions. “Conflict is unavoidable,” he concluded.

ORIGINAL POST (2013-11-6): According to the Daily NK:

Wage levels for workers in some larger industrial enterprises have risen by a factor of approximately one hundred times, Daily NK has learned. The move, which was put forward as part of the “June 28th Policy” in mid-2012 and is designed to bring wages more into line with market price levels, appears designed to improve the productivity and competitiveness of major industrial concerns.

According to a source from North Hamkyung Province, the monthly wage of people working at Musan Iron Mine, Kim Chaek Iron and Steel Complex and Sungjin Steel Mill rose from an average of just 3000-4000 won up to 300,000 won in September and October. In an attempt to forestall the inflation that such a step would otherwise guarantee, 200,000 won of the payment is issued in goods, with just 100,000 won provided in cash.

The source explained to Daily NK on the 5th, “In September the order was handed down in the name of the State Economic Development Commission to Musan, Kim Chaek and Sungjin; it was about guaranteeing independence in terms of production and the authority to set salary levels. At the time most workers did not believe that they were going to be given a wage of 300,000 won, and are really surprised now that they are actually getting it.”

The source went on to assert that the same instructions have been handed down to all provinces, not only North Hamkyung. “Relatively more competitive” industrial enterprises in each province have been selected, he said, and are resetting wages at a higher level.

Explaining the system of payments in kind, the source said, “Because they are concerned about the danger of inflation being created by the wage rises, they give 200,000 won of it in rice, vegetables, side dishes, other necessities, and electronics. Only the remaining 100,000 won is given in cash.” Workers have been told “not to make purchases in public markets since the state is now providing for your daily needs,” although the instruction is not likely to be adhered to.

Predictably, the source revealed that the move has attracted attention from surrounding enterprises. “Workers who had been ‘off sick’ are coming back,” he said, “and workers from other enterprises have been descending on us after hearing that we are getting a lot of wages and other stuff.”

The move appears designed to increase the competitiveness of major industrial enterprises in North Korea, and to improve the attractiveness of joint ventures to companies in China.

At the time of writing, the dramatic wage increase has not generated rice price inflation in public markets in the North Hamkyung Province region. For example, the price of rice in Musan is currently stable at around 5,800 won/kg.

On this, the source concluded, “Because some of the wages have been given in kind, demand in markets will not rise for the time being.” However, he cautioned that later, when workers attempt to buy and sell the products they have received, instability and inflation could result.

Read the full story here:
Wages Rise 100x in Heavy Industry
Daily NK
Lee Sang Yong
2013-11-6

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Evaluation of Kim Jong Un’s first two years: The rise in construction of sports and entertainment facilities and exports to China

Wednesday, October 16th, 2013

Institute for Far Eastern Studies (IFES)
2013-10-16

The first chairman of the National Defence Commission of North Korea, Kim Jong Un, took office two years ago. Since then, construction of sports and entertainment facilities are reported to have increased considerably. According to the South Korean Ministry of Unification, North Korea’s Pyongyang Folk Park (September 2012), Taesongsan General Hospital (March 2013), and Haedanghwa Service Complex (April 2013) were recently completed. Since the launch of the Kim Jong Un regime, the Masik Pass Ski Resort and other similar sports facilities have been undertaken and are nearing completion.

In addition, the People’s Theatre (April 2012), Rungna People’s Pleasure Ground (opened in July 2012), Sunrise Restaurant (September 2012), and Unification Street Center (September 2012) have been recently renovated. In addition, the Mirim Riding Club, Pyongyang Gymnasium, Munsu Wading Pool, Aprok (Yalu) River Amusement park, Karma Hotel, and New Day Hotel and other hotels around Pyongyang are currently under renovation and repair. Entertainment and sports facilities around other major cities are being constructed as well. Furthermore, after the successful launch of Kwangmyongsong 3-2 last December, North Korea has begun to construct major residential complexes for scientists, granting them preferential housing in Unha scientist residence, Kim Il Sung University educator residence, and Pyongsong residence. Other large-scale housing projects are also reported to be under development.

In the wake of major celebrations in North Korea — such as the 100th anniversary of the birth of Kim Il Sung and 60-year anniversary of the “Victory in the Fatherland Liberation War” — a large memorial was erected and existing facilities were repaired. Specifically, the Korean People’s Army Exhibition of Arms and Equipment, Kumsusan Memorial Palace, War Victory Monument, and the Cemetery of the Fallen Fighters of the KPA were refurbished.

Unlike the large-scale construction of sports and entertainment facilities, new constructions of harbors, roads, power plants and other social overhead capital (SOC) is reported to be in decline.

Last August, North Korea’s trade with China has shown an 8 percent increase in exports and 6 percent decrease in imports, following a similar trend from last year. According to the South Korean Ministry of Unification, North Korea’s current trade volume with China is reported to be 4 billion USD (1.89 billion USD in exports and 2.2 billion USD in imports).

North Korea’s most popular export items are mineral resources such anthracite, coal, and iron ore. In the case of clothing products — which are mostly consigned processing — there has been an increase of 42 percent (200 million USD) against the previous year. Major categories of imports from China are crude oil, food, and fertilizers. Compared to the previous year, food imports have declined 57 percent (17.4 million tons), and fertilizer and crude oil imports are also showing gradual reduction at 27 percent (18.3 million tons) and 6 percent (34.6 million tons), respectively.

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