Archive for the ‘Copper’ Category

Russia offers electricity for copper

Wednesday, May 6th, 2015

According to RBTH:

North Korea has offered to allow Russian participation in the development of the Onsong copper deposit, in exchange for Russia providing electricity to the entire east coast of the country.

“The Korean side proposed that Russia consider supplying electricity to the areas of Rason, Chongjin and Tanchon as well as the Wonsan-Mount Kumgang international tourism zone, with the costs of electricity supply covered with copper ore from the Onsong deposit in North Hamgyong Province,” the Ministry for the Development of the Russian Far East said in a press release.

The press note, which summed up the results of the meeting of the Russia-North Korea intergovernmental commission that was held in Pyongyang in late April, did not specify which companies would be involved in the project.

Russia and North Korea are expected to create a special working group to study the feasibility of electricity supply to the Korean peninsula. North Korea is one of the most power deficient countries in Asia with cuts in supply and load shedding being a regular occurrence even in Pyongyang.

Read the full story here:
North Korea offers Russia copper ore in exchange for electricity


DPRK mineral exports to China increase

Sunday, November 6th, 2011

UPDATE 1 (2014-1-21): See more recent data here and here.

ORIGINAL POST (2011-11-6): According to Yonhap:

North Korea’s mineral exports to China have tripled this year compared to a year ago, a study showed Sunday.

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

Over the first nine months of last year, China brought in 3.04 million tons of minerals from the North for $245 million.

Most of the minerals were anthracite coals, the data showed. This year, of 8.42 million tons, 8.19 tons were anthracites.

China is the sole major ally and the biggest economic benefactor for North Korea, a reclusive regime under international economic sanctions following its nuclear and long-range missile tests.

Cho Bong-hyun, an analyst at the IBK institute, said North Korea may be trying to earn much-needed hard currency as it aims to become a powerful and prosperous country by 2012.

“Last year, North Korea ordered its institutions to meet their goals in foreign currency income by this year,” Cho said. “Since exporting minerals is a military business, we can see that the military is trying to meet its target. In addition, the steep mineral export growth was attributable to the lifting of the cap on the amount of mineral exports, as ordered by North Korean leader Kim Jong-il.”

China appears to be trying to stockpile mineral resources at affordable prices, Cho added. North Korean anthracites were traded at an average of $101 per ton, whereas the international standard for quality anthracites is $200 per ton.

“Given that North Korean coals are of very good quality, trade with China must have been made at a fairly low price,” Cho said.

Meanwhile, sources said North Korean authorities last month entirely halted its coal exports, as the impoverished country fears a shortage of energy resources during the upcoming winter.

From January to September this year, China exported 732,000 tons of minerals to North Korea, most of them crude oil.

Here is the IBK web page.  If anyone can find a copy of this report and send it to me to post, I would appreciate it.

Additional information:
1. The economics lessons: A. The more isolated the DPRK’s economy from the global trade and financial system, the greater monopsony power Chinese firms can exert on their North Korean trading partners. B. The rents earned in the current DPRK-China trade regime are visible and have organized constituencies.  Unfortunately the much greater gains that could be reaped if the North Korean economy was more open, integrated, and dynamic remain unseen and their potential beneficiaries remain unknown and unorganized.

2. The Nautilus Institute published a very interesting paper by Nathaniel Aden on China DPRK trade back in June. See it here.

3.  Here is the most recent US Geological Survey report on the DPRK’s mineral sector.

Read the Yonhap story here:
N. Korea’s mineral exports to China tripled from last year: study


Chinese joint venture company takes over Hyesan Youth Copper Mine

Monday, September 19th, 2011

Pictured above (Google Earth): Hyesan Youth Copper Mine.  See in Google Maps here.

According to Xinhua (China):

Hyesan-China Joint Venture Mineral Company, a large joint project between China and the Democratic People’s Republic of Korea (DPRK), started operation at Hyesan of Ryanggang province on Monday.

The mineral company was jointly set up by Wanxiang Resources Limited Company of China and the Ministry of Mining Industries of the DPRK on Nov. 1, 2007. Its main business was to produce and sell copper.

DPRK Mining Industries Minister Kang Min Chol and Chinese ambassador Liu Hongcai attended the opening ceremony.

Kim Chol, chairman of the people’s committee of the Ryanggang province, said at the ceremony that the joint venture was one of the symbols of the development of the DPRK-China friendship and would be a model of modernization, science and economic benefits.

Liu believed the company would make profits for both sides, benefit the two peoples and promote traditional China-DPRK friendship.

According to Reuters:

The mine was located a few miles from the Chinese city of Changbai in the northeastern province of Jilin and was 51 percent owned by Wanxiang, a source with direct knowledge of the project told Reuters on Tuesday.

The mine had a designed annual capacity of 50,000-70,000 tonnes of copper concentrate, expected to contain 20-30 percent copper, he added.

“All the concentrate will be sold to China,” the source said.

The source said the joint venture would conduct second-phase construction to expand the capacity of the mine if production ran smoothly, but did not give details on timing or expanded capacity.

China is the world’s top copper consumer but does not produce sufficient concentrate to meet demand. The country imported 3.4 million tonnes of copper concentrate in the first seven months of 2011, down 11 percent from a year earlier.

According to KCNA:

The Hyesan Youth Mine in Ryanggang Province was successfully updated as required by the new century.

The workers and technicians of the mine together with Chinese technicians and skilled workers completed the vast modernization project and successively ensured their commissioning.

The modernization of various production processes including mining, carriage and ore dressing made it possible to boost mineral production and thus contribute to economic development and the improvement of the standard of people’s living.

A ceremony for the completion of the modernization project at the Hyesan Youth Mine and the Hyesan-China Joint Venture Mineral Company was held on Monday.

Present there were Kang Min Chol, minister of Mining Industry, Kim Hi Thaek and officials concerned, Liu Hongcai, Chinese ambassador to the DPRK, and staff members of his embassy and Han Youhong, president of the Wanxiang Resources Co., Ltd. of China, and personages concerned.

Ri Mun Yong, manager of the Ryanggang Provincial Mining Complex, made an address to be followed by congratulatory and other speeches.

At the end of the ceremony, the participants went round production processes.

That day a reception was given in connection with the ceremony.

Although foreign investors and aid groups frequently build/ repair / upgrade North Korea’s state owned enterprises, it is rare that they are given any credit for their work in the official media.

Previous posts about the Hyesan Mine:
1. Poor electricity supply (2011-5-16)

3. Mine is flooded (2007-11-1)

4. China investing in mine (2007-4-12)

5. Chinese investing in mine (2006-12-24)

Additional mining information:
1. DPRK – China minerals for food program (2011-8-19)

2. DPRK looking to export rare earths (2011-7-23)

3. DPRK – China trade: 1995 – 2009 (2011-6-7)

4. Increase in DPRK’s mineral resources exports to China expected again for this year (2011-2-28)

5. DPRK – China mining deal (2011-2-6)

6. China expanding mining rights in DPRK (2010-1-15)


The mining industry of the DPRK

Sunday, August 7th, 2011

Last week the Nautilus Institute posted a paper on the DPRK mining industry written by Choi Kyung-soo.  You can see the full report here.  A couple of the mine locations were incorrectly reported, so I thought I would correct the record (as I understand it), as well as offer coordinates and satellite imagery of all the facilities mentioned in the paper:

Sangnong Mine (상농광산)
40°36’0.38″N, 128°43’35.40″E
Sangnong Worker’s District, Hochon County, South Hamgyong Province. According to the paper, the mine is located in the “Dancheon district of Hamgyeongnam-do”.

Holdong Mine (홀동광산)
38°52’18.15″N, 126°26’21.98″E
Holdong Worker’s District, Yonsan County, North Hwanghae

Hyesan Youth Mine (해산청년광산)
41°21’52.36″N, 128° 9’28.35″E
Hyesan City, Ryanggang Province

Komdok (Geumdeok) Mine (검덕광산)
40°55’9.41″N, 128°49’13.76″E
Kumgol-dong, Tanchon, South Hamgyong Province

Taehung (Daeheung) Mine (대흥청년영웅광산)
41° 4’24.63″N, 128°51’4.68″E
Taehung-dong, Tancheon City, South Hamgyong

Musan Mine Complex (무산광산련합기업소)
42°14’16.22″N, 129°15’59.70″E
Musan, North Hamgyong

Oryong Mine (어룡광산?)
42°18’13.59″N, 129°22’51.70″E (estimated)
According to the paper, the Oryong Mine is near Ryungchon-ri (42°20’18.19″N, 129°24’39.48″E) in Hoeryong and opened in 2007. The satellite imagery of the area is from 2006 and shows an area under construction near the village. Another source claims this mine is located in Obong-dong, closer to the city of Hoeryong and is a uranium mine.

Jongchon Graphite Mine (정촌광산)
37°55’7.23″N, 126° 6’49.34″E
Jongchon-ri, Yonan County, South Hwanghae.  The paper claims the mine is located in “Jeongchon-gun”, which does not exist.

2.8 Jiktong Youth Coal Mine (2.8직동 청년 탄광)
39°29’42.68″N, 126° 2’3.50″E
Jiktong, Sunchon, South Pyongan

Kogonwon (Gogeonwon) Mine (고건원탄광)
42°40’25.03″N, 130°12’47.28″E
Kogonwon Worker’s District, Saepyol County, North Hamgyong Province

Apdong Mine (압동광산)
38°25’6.96″N, 127°21’8.17″E
Apdong-ri, Phyonggang County, Kangwon Province


Recent DPRK publications

Sunday, June 19th, 2011

Imports from North Korea: Existing Rules,Implications of the KORUS FTA, and the Kaesong Industrial Complex
Mark E. Manyin, Coordinator, Jeanne J. Grimmett, Vivian C. Jones, Dick K. Nanto, Michaela D. Platzer, Dianne E. Rennack
Congressional Research Service (CRS)
June 2, 2011

Download the PDF here.  This publication has been added to the list of previous CRS reports on the DPRK here.


Trade with China 1995-2009
Nathaniel Aden
Nautilus Institute
June 7, 2011

View the paper here.  A link to this paper has been added to the DPRK Economic Statistics Page. The Nautilus Insitute has also posted links to some very interesting presentations from the 2010 DPRK Energy and Minerals Working Group.


[Book] The Contemporary North Korean Politics: History, Ideology, and Power System (현대 북한의 정치: 역사, 이념, 권력체계)
Jong Song-Jang (정성장)
More information TBA, but see here and here (Korean).


[Book] Architekturführer Pjöngjang (German: Pyongyang Architecture Guide)
Philipp Meuser
Order here at Amazon. More here and here.


Increase in DPRK’s mineral resources exports to China expected again for this year

Monday, February 28th, 2011

Institute for Far Eastern Studies (IFES)

The trade volume between North Korea and China has steadily increased, reaching its record high of USD 3.4 billion in 2010. Total exports amounted to 1.19 billion USD while imports doubled that figure to USD 2.22 billion. Imports have continued to grow, increasing by 2.4 times over the previous year.

Since the Cheonan incident and the implementation of May 24 sanctions, inter-Korean economic cooperation has come to a halt, naturally resulting in rise in exports to China. In particular, a significant growth in anthracites exports was observed. The monthly anthracites exports that averaged around USD 10 million surpassed USD 70 million mark last August and maintained USD 50 million monthly average between September to November. In addition, cost-per-ton of anthracite in March which was USD 52.2, jumped to USD 82.8 in November, a climb of 60 percent. This boost is attributed to its increased export.

The current supply of electric power consists mostly of hydroelectric power — reaching over 60 percent– but during the winter season most of the hydropower plants are unoperational due to frozen facilities from harsh winter weather. Anthracites were the alternative resource to fill this gap. Sacrificing power production and exporting great amount of anthracites despite severe winter is a strong indication of the poor foreign currency situation in North Korea.

In its New Year’s joint editorial, North Korea placed heavy emphasis on its anthracite export that took up 60 percent of its total exports. In the statement, four vanguard sectors of coal, electricity, metals, and railroads were highlighted as important industries as “rich underground resources that will help with securing funds and resolving raw material problems.” This is the first time in 13 years – that is, since the Arduous March — for coal to be mentioned first in the New Year’s message.

North Korea also began to lift export restraints of mineral resources like coal and silver from the latter half of last year and ordered to increase imports of rice and corns in place of minerals.

The reason food procurement is placed first at the expense of its mineral resources is believed to be associated with the implementation of the succession involving Kim Jong Un, and to keep North Korean people’s dissatisfaction under control and manage the domestic situation.

North had placed restraints on coal, gold, silver, lead, and zinc exports from 2007 through adopting export control of mineral resources.

In addition, North Korea and China will meet in Beijing to sign an agreement on joint development of underground resources. This agreement will include Musan Mine and rare-earth mines that POSCO (The Pohang Iron and Steel Company of South Korea) has shown interest in in the past for development. China’s moves in this sector are suspected as China’s attempt to monopolize the DPRK’s underground resources.

The DPRK’s Joint Venture and Investment Guidance Bureau and China’s Ministry of Commerce were expected to meet on February 15 to discuss agreements related to underground resources development. On the agenda was Musan Mine, abundant in gold and anthracite, and other mines rich in rare-earth elements. Other mines are also known to be specified in the agreement.

China is expected to bring private companies into the underground resources development project after reaching an agreement with the DPRK. According to our source, “both parties will establish a joint venture investment corporation in Hong Kong after signing the agreement.”

Construction of a highway connecting Heilong City of Yanbian Korean Autonomous Prefecture to Nampyong and Chongjin of North Korea and railway system linking the cities of Heilong, Nampyong, and Musan are currently underway, expected to be in operation by end of this year. Jilin Province and Ministry of Railways of China began construction of this railway system from October 2010 investing CNY 1.19 billion, which runs a distance of 41.68 km. However, it is expected to extend further onto Chongjin and is considered to become the major transportation hub, integrating economic cooperation between the two countries.

Musan Iron Mine is known as the largest outdoor iron mine in Asia and Tonghua Iron and Steel Group along with three other Chinese corporations acquired 50-year development rights of Musan Iron Mine. They are bringing in about 120 tons of iron ore each year and more is expected to be brought in once the Heilong-Musan rail link is completed.


DPRK-Chinese mining deal

Monday, February 7th, 2011

According to Yonhap:

North Korea and China are expected to sign an agreement on joint development of the North’s underground resources in the middle of this month in Beijing, a source here said Sunday.

“It has been learned that Pyongyang and Beijing are expected to conclude a deal to jointly develop North Korea’s underground resources on Feb. 15, one day before the birthday of North Korean leader Kim Jong-il,” said the source, noting the accord will be signed in Beijing between China’s Commerce Ministry and the North’s Joint Venture Investment Committee.

“Specifically, the two sides may agree to jointly develop natural resources such as gold, anthracites and rare earths under the bilateral deal. Following the agreement, the two countries are likely to establish a joint venture company in Hong Kong,” said the source, asking to remain anonymous.

Trade between North Korea and China reached US$3.06 billion in the first 11 months of last year, which marked a rise of 9.6 percent from the 2008 annual volume of $2.7 billion. Mineral resources like coals and iron ores account for over 30 percent of the North’s exports to China.

Chinese mining investors have had mixed results in the DPRK despite geographical proximity and monopsony purchasing power (the Chinese can offer lower prices because in many cases they are the only purchaser/investor).

At one point, a Chinese firm had a controlling share of the DPRK’s Hyesan Youth Copper mine (Satellite image here).  As best I can tell, the mine is no longer operable because of flooding from nearby dam construction.

A Chinese firm had also invested in the Musan Mine, the DPRK’s largest, conveniently located on the Chinese border (Satellite image here). This deal also fell trough (see here).

I have heard informally that Chinese mining investors do not particularly like doing business in the DPRK because their North Korean business partners routinely violate contract terms and local officials need to be bribed repeatedly.  Today Chinese mining firms operate across the world in both developing and developed countries, so why bother with the DPRK?

The particular deal mentioned in this Yonhap article is interesting because it hints that the Chinese and North Korean central governments are setting the terms for mining investment in the DPRK for the first time.  This will give local officials less room for post-contractual rent-seeking behavior and could smooth the way for regular/predictable business operations in the DPRK.

Again, centralized corruption is preferable to decentralized corruption for investors.

Read the full Yonhap story here:
N. Korea, China likely to ink deal on joint resource development


China pulls out of DPRK mining deal

Thursday, July 30th, 2009

According to the Choson Ilbo:

A Chinese investment company developing a copper mine in North Korea with a North Korean company sanctioned by the UN Security Council has reportedly called an abrupt halt to the project.

An industry source in China said the investment firm sent a letter to NHI Shenyang Mining Machinery, the company it had commissioned to build facilities for the mine in Hyesan, North Korea, telling it to stop construction. An estimated 400,000 tons of copper are deposited there.

The Chinese firm had signed an agreement with (North) Korea Mining Development Trading Corporation (KOMID) [NKeconWatch: a.k.a. Korea Mining Development Corporation) to develop the mine in November 2006. But the North Korean partner was blacklisted by the UN Security Council after North Korea carried out its latest nuclear test.

The industry source said, “When Chinese Vice President Xi Jinping visited Pyongyang in June last year, he pledged full support for the development of the Hyesan copper mine so that it could become a model for investment by Chinese business in North Korea. This prompted NHI to hurry construction so that production could start in September this year.”

But he added the Chinese government apparently persuaded the investment firm to stop the project as Beijing takes part in the UN sanctions. “Otherwise, it’s unusual for a project to be stopped at this late stage,” he said. The investment firm reportedly gave NHI no reason for the cancellation.

Looking at Hyesan on Google Earth, this appears to be the only large-scale minig operation in Hyesan.

Read the full article below:
N.Korea Mining Project Buckles Under UN Sanctions
Choson Ilbo


2007 US Geological Survey published on North Korea

Wednesday, October 22nd, 2008

An advanced copy of the 2007 US Geological Survey of North Korea has been published. 

Here is the outlook from the author, John C. Wu:

For the next 3 to 4 years, the North Korean mining sector is likely to continue to be dominated by the production of coal, iron ore, limestone, magnesite, and zinc. Because of the continuing strong demand for minerals by China, its investments in North Korea’s mining sector are expected to continue to increase beyond its current investments in coal, copper, gold, iron ore, and molybdenum into other mineral commodities, such as nickel, crude petroleum, steel, and zinc. North Korea’s economy is expected to recover slowly but its real GDP is expected to grow at less than 1% during the next 2 years.

The whole report is fairly brief and worth reading in full.  You can download it here: usgs-dprk.pdf or read it on line here.


North Korea on Google Earth

Thursday, October 2nd, 2008

North Korea Uncovered: Version 12
Download it here

mayday.JPGAbout this Project: This map covers North Korea’s agriculture, aviation, cultural locations, markets, manufacturing facilities, energy infrastructure, political facilities, sports venues, military establishments, religious facilities, leisure destinations, national parks, shipping, mining, and railway infrastructure. It is continually expanding and undergoing revisions. This is the 12th version.

Additions include: Tongch’ang-dong launch facility overlay (thanks to Mr. Bermudez), Yongbyon overlay with destroyed cooling tower (thanks to Jung Min Noh), “The Barn” (where the Pueblo crew were kept), Kim Chaek Taehung Fishing Enterprise, Hamhung University of education, Haeju Zoo, Pyongyang: Kim il Sung Institute of Politics, Polish Embassy, Munsu Diplomatic Store, Munsu Gas Station, Munsu Friendship Restaurant, Mongolian Embassy, Nigerian Embassy, UN World Food Program Building, CONCERN House, Czech Republic Embassy, Rungnang Cinema, Pyongyang University of Science and Technology, Pyongyang Number 3 Hospital, Electric Machines Facotry, Bonghuajinlyoso, Second National Academy of Sciences, Central Committee Building, Party Administration Building, Central Statistics Bureau, Willow Capital Food House, Thongounjong Pleasure Ground, Onpho spa, Phipa Resort Hotel, Sunoni Chemical Complex (east coast refinery), Ponghwa Chemical complex (west coast refinery), Songbon Port Revolutionary Monument, Hoeryong People’s Library, Pyongyang Monument to the anti Japanese martyrs, tideland reclamation project on Taegye Island. Additionally the electricity grid was expanded and the thermal power plants have been better organized. Additional thanks to Ryan for his pointers.

I hope this map will increase interest in North Korea. There is still plenty more to learn, and I look forward to receiving your contributions to this project.

Version 12 available: Download it here