Archive for the ‘Ministry of Extractive Industries’ Category

DPRK elevates status of national resource development office

Tuesday, December 28th, 2010

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-12-22

On December 1, the North Korean Supreme People’s Assembly Standing Committee announced an order to elevate the position of the National Resource Development Office, which is overseen by the Cabinet’s Ministry of Extractive Industry, to the Ministry of National Resource Development. According to the Korea Central News Agency, this measure is aimed at increasing development and export of underground resources as international sanctions against the North further limit Pyongyang’s access to foreign capital.

The regime’s focus on increasing earnings can be seen in Kim Jong Il’s on-site guidance trips, as well. The KCNA reported on December 3 that Kim had recently visited Danchon, South Hamgyong Province, touring the Danchon Magnesia Factory, the Danchon Mining Equipment Factory, and the Danchon Port facilities. During his visit to the magnesia factory, Kim Jong Il emphasized the need for increasing the production of quality asphalt. In addition, after receiving a report on the status of implementation of CNC in the Danchon Mining Equipment Factory, he stated, “The factory needs to normalize at a high level of mass production to turn out the necessary numbers of mining and processing equipment.” Upon reviewing the Danchon Port facilities, Kim Jong Il urged staff to work towards ensuring a loud chorus of boat whistles in the port for the upcoming 100th anniversary of the birth of Kim Il Sung in 2012.

U.S. financial sanctions levied against the North have made it difficult for Pyongyang to collect export earnings from its mining efforts, one of its key earners of foreign capital. In May of last year, when sanctions were strengthened in response to North Korea’s second nuclear test, European and even Chinese banks froze money transfers to North Korea. The [North] Korea Magnesia Clinker Manufacturing Group could not collect 4.6 million USD in earnings from the export of zinc to Europe. It appears that the North has tried to compensate for these losses by increasing the export of iron ore from Musan. Exports to China passing through the Musan customs office have more than doubled, rising from 1200 to 2500 tons per day.

The mines of Musan, holding more than seven billion tons of iron ore, are the North’s primary vehicle for earning foreign capital. In 2004, China’s Tonghua Steel and Iron Group signed a contract with North Korean authorities granting the group 50-year development rights at some key North Korean mines, and is planning to invest seven billion Yuan in developing the sites. Beijing plans to use the access to North Korean mines to meet some of the expected 80 million ton shortfall of iron ore in 2010. However, there are rumors that North Korea has canceled the contract with no explanation, causing much speculation about the direction of Pyongyang’s export strategy.


Hyesan Mine, the Center of Copper Production Is Flooding!

Thursday, November 1st, 2007

Daily NK
Moon Sung Hwee

A source familiar with issues inside North Korea said on the 30th, “Most of the underground tunnel of Hyesan Youth Mine in Yangkang Province is now under water.” The source added, “Ever since Samsoo Hydroelectric Power Station started filling up the dam last year, the mine began to flood, and now it can not operate properly.”

Hyesan mine produces 80 percent of the country’s copper. North Korea expects that the mine could produce copper for the next forty years. Hebeisheng-Luanhe Industry in China once attempted to buy 51 percent shares of the Hyesan Youth Mine. However, this was unsuccessful due to opposition from North Korea’s second Economic Commission, which manages the military economy.

North Korea began the construction of Samsoo Hydroelectric Power Station in February of 2004, mobilizing thirty thousand troops of the so-called “Shock Brigade for the Propaganda of the Party Ideology” every year. Unfortunately, Samsoo Power Plant became the major cause of the flooding of Hyesan Mine.

If this mine is inundated with water, North Korea has to import huge amounts of copper. It was the Propaganda and Agitation Department that led the construction of Samsoo Power Plant, which generates 50,000 kilowatts of power and is now causing the flooding. It is absurd that North Korea is about to lose its principal copper mine because of Samsoo Power Plant, a facility that was primarily constructed for political purposes.

Jung You Sim (37, pseudonym), a defector from Hyesan who came to South Korea in July of this year, stated that “Hyesan Mine is almost abandoned. It takes about three years to fill up the Samsoo Dam with water. Even now, there is difficulty in pumping out the water leaked from the power plant. Once the dam is completely filled, the total volume of water will be 1,300 million cubic meters. By then, the water pressure will have made it impossible to pump out the water that has infiltrated the mine. North Korea must choose either Samsoo Power Plant or Hyesan Mine.”

Samsoo Power Plant was constructed in Jangan-ri of Hyesan, Yangkang Province; Hyesan Mine is located nearby in Masan-dong.

The construction of Samsoo Power Plant which began in February 2004 evoked a great deal of controversy from the beginning. The Guidance Department of the Party and the Ministry of Extractive Industries opposed the construction citing the high risk of flooding in the Hyesan Mine.

However, Jeong Ha Cheol, then Secretary of Propaganda and Agitation Department and Choi Choon Hwang, then vice director of the Central Committee of the Party pushed hard for the construction with the aim of boosting their political standing and succeeded in obtaining Kim Jong Il’s approval. It is almost certain that both men have been purged.

At that time, the Propaganda and Agitation Department reported that the water leakage could be prevented if the bottom of the power plant dam is pressed hard and cemented with mud about three meters deep. However, experts from France who inspected the area opposed the construction because the land itself was calcareous and unstable. The water leakage was inevitable.

First explored in the 1960s, Hyesan Mine produces 10,000 tons of copper concentrates annually. When Gapsan Dongjum Mine, explored during the Japanese colonial period, was finally depleted and closed in 1990, Hyesan Mine became the lifeline of the nation’s copper production. It flooded before in the mid 1990s but was restored shortly thereafter.

At that time, the mine flooded because the pumping device stopped operating due to the lack of electricity across the country. Although the workers at the mine did their best to pump the water, they could not stop the water flowing into the mine at a speed of 480㎥/hour. In January, 1997, Hyesan Mine flooded again, as did other mines throughout the country, and lost all mining facilities.

The workers faced insurmountable obstacles in trying to save the mine. This was because some workers at Hyesan mine had removed the copper from pumping devices and had smuggled it to China before the flood hit the country.

When the officials from the Ministry of Extractive Industries visited Hyesan Mine in 1999, they informed the local cadres that the mine’s copper production had become insufficient for the manufacture of military supplies, and as a result, copper would have to be imported from Chile.

Defectors coming from Yangkang Province said that when Kim Jong Il paid a visit to the mine in October, 1998 and received the report on the difficulties in the mine’s operation, he said, “We must save the mine at any cost. I will supply the money.” At once, the chief secretary of Yangkang Province and the Ministry of Extractive Industries took charge of restoring the mine and organized the recovery workforce.

Kim Jong Il provided the so-called “Revolutionary Fund” for the mine’s recovery. He sent $ 3.8 million in 1998 and $2.6 million in 2001, paid all in cash. In 1998 when a great number of people were starving to death, corn was available in China for $ 137 per ton. The amount of money spent on the mine’s recovery could have been used to purchase approximately 28,000 tons of corn. In those days, the local residents in Yangkang Province were made to listen to lectures about the ‘General’s Revolutionary Fund’ over and over.

Upon the order for recovery, residents in Masan 1-dong and 2-dong in Hyesan city were mobilized every weekend to dig out the dirt in the mine. By May 1, 2003, the locals had dug to a depth of 710 m. Later that year, the mine produced 1,500 tons of copper concentrates, and in 2004 it produced 3000 tons.

The local people made huge sacrifices to recover Hyesan mine, and the recovery cost about $ 7 million. However, it was all in vain. The mine is now again flooded due to the construction of Samsoo Power Plant. Hyesan defector Jung Yoon Sim said that Kim Jong Il later changed his tone when he visited Yangkang Province and heard about the recent flooding, saying “it was anticipated.”

Samsoo Power Plant can produce up to 50,000 kilowatts of power. However, about 60,000 kilowatts of power are needed to supply electricity to the apartment complexes constructed in 2003 in Samjiyun county of Yangkang Province.

After all was said and done, Kim Jong Il had mobilized 30,000 people for three and a half years and had them work 14 hours per day while providing a mere 580 grams of grain daily in an attempt to build a power plant that generates only 50,000 kilowatts. In doing so, he destroyed the nation’s leading copper production center.

President Roh praised such an incompetent and irresponsible man as “a charismatic leader who has a deep understanding about the affairs of the country and has faith in the system.”