Russian firm Evraz selling coking coal to DPRK

According the Russian outlet Izvestia (translated by Google Translate):

Tensions between the U.S. and North Korea do not interfere with the group Evraz, the largest shareholder is Roman Abramovich, it is advantageous to work with both countries: part of the holding coal company “Raspadskaya (Распадской)” began selling coal in North Korea. At the end of 2013 the total supply of “Raspadskaya” to North Korea could reach $ 32 million – half of it is comparable to last year’s total exports from Russia to North Korea.

During the first half of 2013 “Raspadskaya” delivered to North Korea coking coal at $ 4.5 million, follows from the statements of the company. In the total volume of exports “Raspadskaya” is about 4%, which makes the DPRK fifth largest export market for sales of coal (after China, Ukraine, South Korea and Japan).

In the DPRK embassy in Russia, “Izvestia” reported that, except for “Raspadskaya”, none of the Russian coal industry supplies goods to North Korea. There’s also clarified that the recipient of coal – Metallurgical Works named. Kimchaek– one of the largest steel companies in North Korea.  Total design capacity metkombinatu them. Kimchaek on all kinds of products, according to various estimates, 6.5 million tons, but in recent years the plant has significantly underutilized. According to South Korean estimates, the actual production of steel in all of North Korea is 1.25 million tons per year (Statistics Korea itself does not publish a lot of years). 

The volume of coal supply to the “Raspadskaya” to North Korea – to 20 kt (4-5 railroad tracks) on a monthly basis under the current annual contract, described in the company. Price is tied to the international price system (quotation Australian HCC with a discount for the quality of the brand SHCC). That is the sum total of the contract – about $ 32 million, considered BCS analyst Oleg Peter and Paul: The current market price of coking coal at $ 152 per ton (FOB Australia), but the average price for the first half was $ 134.

– Last year, the entire bilateral trade between Russia and North Korea amounted to less than $ 80 million – says Ludmila Zakharova, a senior researcher at the Center for Korean Research Institute of Far Eastern Studies. – At present, trade between our two countries in a state of crisis, Russia accounts for less than 1% of North Korea’s foreign trade.

In 2012, Russian exports to Korea totaled $ 65 million, told “Izvestia” in Economic Development. North Korea among foreign trade partners of Russia occupies 124th place with a “specific weight of 0%,” stated in the department.  Starting this year, however, there is growth of sales: in January-July 2013 two-way trade turnover of Russia and North Korea reached $ 56 million ( an increase of 31% compared to the same period in 2012), including Russian exports totaled nearly $ 51 million (an increase of 38%).

A small volume of direct trade is partially offset by other forms of economic cooperation continues Ludmila Zakharova. For example, it is estimated that about $ 100 million a year is the so-called labor services: experts from North Korea come to work in Russia (for the current year quota for North Korean workers reached 35 thousand people). Since the DPRK shortage of agricultural land, there are projects to provide Koreans to lease farmland in the Primorye Territory. In the last few years has intensified investment direction of Russian-North Korean cooperation. The other day, completed the reconstruction of the railway Hasan-Rajin. Investment in this project is a joint Russian Railways and the Ministry of Railways North Korea amounted to more than $ 200 million

According to data provided by the Ministry of Economic Development, the amount of accumulated investment of Russia to the DPRK at the end of the first quarter of 2013 amounted to only $ 572 million, while the DPRK in Russia – more than $ 79 million

Evraz – a vertically integrated global company with assets not only in Russia but also in other countries, including the United States. Evraz North American division includes several large steel companies formerly known as Oregon Steel, Rocky Mountain Steel, Claymont Steel and Ipsco.

– Evraz to some degree of risk. Under existing U.S. sanctions against the DPRK any large company with offices in the U.S. carries certain risks, working with North Korea – warns Ludmila Zakharova. – America includes a list of objects sanctioned North Korean banks and organizations that are involved in nuclear and missile program. All legal entities operating in the United States, engaging in economic relations with the companies on this list are subject to the relevant law and can not only get the fines, but generally lose access to the U.S. market and the U.S. banking system. In this case, unlike the UN sanctions, the U.S. rules imply a sufficiently broad interpretation than may be exploited Evraz. Of course, the steel industry is difficult to draw to a nuclear program, but you can.

The contract with the DPRK was verified for international risks assured “News” in the “Raspadskaya”.

– At Evraz in America a lot of assets, but the supply of this market are small. Much more dangerous for her to lose access to local banking system – says Oleg Peter and Paul. – Still, the U.S. market civilized, hardly any of the competitors Evraz want to speculate on its relations with the DPRK. Also tied to the steel industry’s nuclear program would be extremely difficult. 

If any Russian translators care to improve on the text offered by Google Translate, please do so.

Read the full story here:
Компания Абрамовича подзаработает в Северной Корее


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