Archive for the ‘Ministry of Coal Industry’ Category

North Korean coal market routines changing

Sunday, June 14th, 2020

By: Benjamin Katzeff Silberstein

That’s essentially the story told by Daily NK here, and it appears like some mines may be successfully cutting out a middleman:

“Coal mined from state-run coal mines is supposed to go to an agency in charge of distribution, but [these days] not all of the coal is being supplied to the appropriate agency,” the source said. “Coal mines have to make a profit to feed the large number of workers they have, so they decided to start doing business directly with the procurement and sales departments at companies.”

Some companies that received coal from this distribution system now have to buy the coal directly from coal mines, the source said, adding, “In these cases, coal mines sell the coal at a cheaper price than the usual market price.”

Some trading companies have reportedly begun working with railway authorities to transport large amounts of coal by train rather than by truck.

“They are making efforts to reduce distribution costs by going to coal-scarce areas and selling coal there while buying and then reselling that region’s specialty goods,” the source said.

“Of course there is still wholesale selling of coal taking place among merchants located near the mines. Since coal is a commodity that is always in demand, buyers are flocking to the markets,” the source added.

Generally, coal in North Korea used to be sold at around KPW 300,000 per ton, but by the end of 2017, after the implementation of more severe international sanctions, the price had plummeted to around KPW 200,000. Yet, due to smuggling and other factors, coal prices crept back up to KPW 290,000 per ton last year, according to the source.

(Source: Kang Mi Jin, “State-owned coal mines are finding new ways to make money,” Daily NK, June 11th, 2020.)


North Korea’s domestic impacts of lower coal prices

Tuesday, September 22nd, 2015

By Benjamin Katzeff Silberstein

North Korea is seeing some interesting impacts domestically from the lowered coal exports. DailyNK reports that market trade has picked up in intensity as a result of the lower exports of coal:

Amidst the growing private economy in North Korea, a number of people are growing wealthy by cashing in on the expanding distribution industry. Recently, a growing number of these newly rich are purchasing China’s Jinbei brand of small 2-3 ton load trucks to facilitate business operations, Daily NK has learned.

“Recently, Jinbei trucks coming in from Dandong Customs House through to the Sinuiju customs office in North Korea are becoming very hot items in the transportation market,” a source in North Pyongan province reported to Daily NK on September 16th. “Foreign-currency earning enterprises are importing these smaller Jinbei trucks which are quite different from the 20-30 ton load trucks that were previously the norm.”

This information was cross-checked via an additional source in the same province and a source in South Pyongan Province.

As North Korean coal exports have decreased and domestic market activity has picked up, the small trucks have become more useful for delivering goods to local markets. “Ordinary men use bicycles or motorbikes to distribute goods, but the rich are able to buy these small 2-3 ton load trucks and use those instead,” he explained.

These trucks, as with most vehicles in North Korea, are first imported by foreign-currency earning enterprises and sold unofficially to individuals with the cash to pay up front and in full–i.e. the donju. Because possession of vehicles is still officially forbidden in North Korea, the car remains registered under the name of the affiliated enterprise’s name; the entrepreneurial individual utilizing it kicks back a portion of his–or, less frequently, her– profits to the company.

Read the full article:


Jinbei trucks roll in, ‘donju’ distribution operations rise



KCNA: 20-day industrial output value increases over Jan 2011

Friday, January 27th, 2012

According to KCNA (2012-1-25):

The gross industrial output value grew 1.2 times for twenty days of January this year as against the same period last year.

This is the result of the high-pitched drive waged by all the workers of the country since the first day of this year after receiving with excitement the joint calls of the Central Committee and the Central Military Commission of the Workers’ Party of Korea, the joint New Year editorial for this year and the letter of the working people in South Hamgyong Province.

In the period, the Ministry of Light Industry increased the production 1.4 times and the Ministry of Food and Daily Necessities sharply boosted the production.

Thermal and hydropower stations have increased the ratio of operating the generating equipment.

Much effort is being concentrated on supplying coal to the thermal power plants and chemical and metal plants and developing more coal beds.

The Ministry of Coal Industry produced 12,000 more tons of coal than planned for the 20 days.

Iron mills and steelworks also increased the production.

The freight transport volume increased by 12 percent from the same period last year.

Innovations were made in the production of vinalon and fertilizer by the industrial establishments in the field of chemical industry and in the production of custom built equipment and mining machines by the industrial enterprises of the field of machine industry.

The forestry stations and pit wood stations increased the timber production.

Progress has been reported on a daily basis from the important projects including the building of apartments in Mansudae areas and the Paektusan Songun Youth Power Station.

For the uninitiated, this is about as close as the DPRK gets to releasing economic statistics. Note there are no base numbers–only [some] % increases. Also, despite the measure being officially named “output value”, it is really just a claim of increased physical production.  There is no value (prices) or mention of “services” included in these measures.

Unfortunately without more solid numbers, and the proclivity to ascribe productivity gains to effective propaganda, these reports cannot be taken seriously.

Although we all talk about the DPRK’s GDP and per capita income as if the numbers are solid, the reality is quite the opposite.  In addition to the general lack of information, there are all sorts of methodological problems with assessing the value of the DPRK’s economy.  Here are some helpful sources if you want to learn more:

1. DPRK Economic Statistics Report

2. G. Warren Nutter papers:

– (JSTOR) “Soviet Industrial Growth”, Source: Science, New Series, Vol. 130, No. 3370 (Jul. 31, 1959), pp. 252-255

-(JSTOR) “Industrial Growth in the Soviet Union”, The American Economic Review , Vol. 48, No. 2, Papers and Proceedings of the Seventieth Annual Meeting of the American Economic Association (May, 1958), pp. 398-411

-(JSTOR) Some Observations on Soviet Industrial Growth”, The American Economic Review , Vol. 47, No. 2, Papers and Proceedings of the Sixty-eighth Annual Meeting of the American Economic Association (May, 1957), pp. 618-630

3. The North Korean Economy by Nicholas Eberstadt

4. Assessing the economic performance of North Korea, 1954–1989: Estimates and growth accounting analysis

5. Bank of Korea’s assessment fo the DPRK economy in 2010.

6. My North Korean Economic Statistics Page


DPRK military strenghtens hold on economic interests

Wednesday, June 10th, 2009

UPDATE: IFES has contacted us with an update to this report:

“North Korea exports between 2-3 million tons of coal, collecting approximately 200 million USD.”

Original Post:
Institute for Far Eastern Studies (IFES)
NK Brief No. 09-6-9-1

The North Korean military, which has recently taken a hard-line position internationally with rocket launches, a nuclear test and inter-continental ballistic missile (ICBM) launch preparation, appears to be strengthening its position domestically, as well. It has reportedly taken charge of coal exports, previously the responsibility of the Cabinet, and other key economic interests.

According to sources inside North Korea, authority to export anthracite, the North’s most valuable export item, was transferred from a trading company under the control of the Cabinet to a military trading company earlier this year. North Korea exports between 200-300 tons of coal each year, collecting approximately two billion USD in foreign currency. Previously, this was shared among branches of the government, with the military, the Korean Workers’ Party and the Cabinet all similar export quotas.

One source stated, “Recently, China’s trade minister signed a contract for 60,000 tons of coal from a military-run trading company, and delivered one million USD-worth of corn as payment,” noting, “previously, North Korea’s trade partner [with China] was the Cabinet-controlled trade company.” The same source went on to note that it was “exceptional that as North Korea suffers from foreign capital shortages, it demands payment not in cash, but in corn…it looks like it is measure for military use.”

Other sources reported that, as of this year, the military has also taken control of the Bukchang Thermoelectric Power Plant, the country’s largest steam-powered electrical station. The Bukchang plant, built with Soviet supplies in 1968, can produce up to 2 million kW of electricity. It was formerly operated by the Ministry of Electric Power Industry, which is under the control of the Cabinet, but at the beginning of year, some authorities were purged on charges of bribe-taking and providing power designated for government facilities to foreign capital enterprises and other businesses. Since then, the military has run the plant.

The increased number of economic assets in control of the military reflects the military’s recently-strengthened position within the regime. The North Korean economy can be divided into several sectors: Kim Jong Il’s private fund, managed by Party operations; the military-industrial ‘second economy’; and the official economy, under the control of the Cabinet. The military’s increasing control over the official economy appears to be a move to completely implement ‘Military-first Politics.’


North Korean minister sacked over Kim jibe: report

Thursday, January 18th, 2007

The Nation

North Korea’s energy minister has been fired because he suggested that the power supply to leader Kim Jong-Il’s guesthouse should be diverted for public use, a Japanese newspaper said Thursday.

Ju Tong-il, minister of power and coal industries, was fired late last year by the leaders of the impoverished Communist state, the evening edition of the Mainichi Shimbun daily said in a story from Beijing.

“Our country’s energy situation is extremely severe,” Ju told a meeting of energy-related officials last spring, according to the daily, quoting unnamed sources close to the North Korean government.

“Or better yet, why don’t we get back electricity fed to the guesthouses of our general?” Ju reportedly suggesting, referring to Kim.

Ju later excused his remarks, saying: “I just wanted to express the fact that our domestic electricity condition is paralyzed.”

But he came under fire from leaders of the ruling Workers Party and was then dismissed, the daily said.

Agence France Presse

Golden Villas, Let’s Share Electricity!
Daily NK
Yang Jung A

While North Korea’s electrical power supply worsens, North Korea’s Premier Park Bong Ju pushes for the expansion of energy supply and civil electrical support only to receive a personal punishment from authorities or in actual, his position changed.

“As a result of energy and other issues, Ju Dong Il, the Minister of the Electricity and Coal Industry was removed from his position” a Japanese newspaper “Mainichi” reported on the 18th, citing a source related to the North Korean government.

The Minister Ju was known for his proposal on energy made at a policy meeting early 2005 where a comment was made “The electricity situation in our country is seriously grave” and suggested “How about we redirect the electricity from our leader’s personal residence and use that.”

This proposal suggested that the electricity crisis be partly solved by redistributing some of the electricity supplying Kim Jong Il’s numerous personal villas throughout the nation, to much needed industries and homes.

As the Minister Ju realized his comments had set a predicament, he tried to justify himself stating “I simply wanted to express that the country’s electricity is in an immobilized state” but was known to have been reprimanded by the central authorities and his position changed. Since last October, the Ministry of the Electricity and Coal Industry had been separated to the Ministry of Electrical Industry and the Ministry of Coal Industry.

In the same month, Premier Park expressed his concerns on the export of coal to China at a trade conference saying “If this situation continues, our country will be faced with serious implications from the energy crisis. The people will be unable to use their central heating and industries will stop. It would be better to refrain from further exports.” The newspaper also mentioned that Premier Park had gone to the extent of submitting a proposal and that the ministry had even settled on the suspension of coal exports.

However, following the nuclear experiment, the National Defense Commission asserted that the acquirement of foreign currency was an absolute necessity in strengthening the military and strongly urged for the resumption of exports. In the end, the ministry’s decision was overturned and exports recommenced.

Though Premier Park has not yet been replaced, under the orders of authorities, he is known to be spending his time in self-discipline as “for now, revision is necessary.” Though Premier Park’s name is listed on the roll of honors, he has not been seen in the presence of Kim Jong Il.