Archive for the ‘Coal’ Category

North Korea is more connected to global markets than you might think

Wednesday, October 13th, 2021

By: Benjamin Katzeff Silberstein

After a hiatus during the summer following my PhD defense, I now plan to get back to posting regular analyses and news content here. First up, an interesting example of why the North Korean economy is in fact more connected to global commodity markets than many might think.

Over the past few weeks, coal prices have skyrocketed in China, following energy shortages record-high coal prices. In September, the country’s coal imports surged by 76 percent, fueled flooding in one of the country’s main coal producing regions.

Therefore, it shouldn’t be surprising that Chinese demand for North Korean coal — the commodity at the heart of international sanctions on North Korea — is reportedly growing. As Daily NK reports:

According to a source in Pyongyang on Wednesday, there have been noticeably more requests for coal from Chinese traders since North Korea’s national foundation day holiday on Sept. 9. He said there have been several illegal transshipments of coal for export over the last month.

China has recently limited trade with private North Korean traders, dealing instead with official North Korean trading bodies. The source said, however, that Beijing now approves transactions with any North Korean entity that can provide China with coal, including private ones.

In fact, the Chinese government has reportedly launched no particular crackdowns on private imports of North Korean coal.

Rather, according to a source in China, some provincial civil servants in China are advising traders to take care not to get photographed when they transship coal. Essentially, the Chinese government is turning a blind eye to imports of North Korean coal, an internationally sanctioned item. At the same time, they are asking traders to exercise caution, aware that the international community is watching.

(Source: Seulkee Jang, “Amid coal shortages, Chinese traders on the hunt for more North Korean coal,” Daily NK, 7/10/2021.)

There are several things worth noting about this. First, again, it should not be surprising. China’s enforcements of sanctions against North Korea depends primarily on whether Beijing believes it to be in the national interest to clamp down on trade or smuggling. Clearly, China now needs cheap coal, and it’s been a long time since the North Korea issue was at the center of international politics and diplomatic tensions. So there appears to be comparatively little to lose in increasing trade for the moment, although China has been significantly letting up on its sanctions enforcement for several years now, since the days of “maximum pressure” in 2016–2018.

Second, North Korea still appears to be getting shafted by China, who exploits its position as the almost exclusive monopoly buyer buyer to purchase coal from North Korea at prices lower than world market prices or Chinese domestic prices. The precise proportions are uncertain, but Daily NK reports that China is paying less than half of world market prices for coal imports from North Korea, although their source also notes that the North Korean side is using the global shortage as leverage to jack up prices. In other words, while China may in some sense be North Korea’s “patron”, commercial market logic is much more important in coal trade than often assumed, and China isn’t necessarily doing it to help North Korea.

Third, and to tie back to the title of this piece, North Korea, despite its policies of economic autarky, is in fact deeply connected to global commodity markets. This isn’t just true for currency prices. Although the size of North Korea’s foreign trade remains comparatively abysmal, its economy is, just like most other economies today, tied to the broader dynamics of global supply and demand.

It still remains to be seen how much trade can expand under the current North Korean border shutdown. Though some goods are getting through, the border largely remains under lockdown due to Covid-19 despite intermittent news reports that trade might restart and return to its former scale. As many analysts have noted, Covid-19 has succeeded in closing the border more tightly to trade than most sanctions regimes have. How much Pyongyang is willing to meet Chinese demands and let coal shipments go across the border in larger scale, potentially increasing the country’s exposure to the virus (in the eyes of the leadership) remains to be seen.

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North Korean electricity supply and the coal mystery

Wednesday, February 17th, 2021

By: Benjamin Katzeff Silberstein

Kim Jong-un recently complained that North Korea’s electricity production is too low, and that goals and targets in the sector aren’t ambitious enough. On the face of it, this is puzzling. At least in the early days of “maximum pressure”, electricity supply was reportedly increasing and becoming cheaper. With less coal to export, more could be used (for cheaper) inside the country in coal-powered electrical power plants.

It seems, however, that a lack of spare parts and equipment for the country’s power plants is a major part of the problem. Moreover, the government is having a difficult time charging for electricity, since people tamper with the outdated watt-meters in their homes. Daily NK:

North Korea has apparently continued to illegally export coal even since 2017, when UN Security Council Resolution 2371 placed a complete ban on exports of North Korean coal. However, export totals have reportedly fallen compared to what they were prior to the sanctions.

Because of this, the authorities are calling for the use of “idle” coal in electricity production. However, even if they boost supplies of coal, actually increasing electricity production commensurate with that increase in supply will not be easy due to obsolete power generating equipment.

Acknowledging this problem, the authorities have also reportedly included in their electricity policy an order for the Cabinet to take responsibility for outdated equipment at the nation’s thermoelectric and hydroelectric power stations and immediately repair it.

Given that the party has issued an order to repair the equipment as quickly as possible, work on the repairs will likely begin. However, in the current situation with the border closed, the source told Daily NK it is uncertain whether North Korea can domestically produce or import the equipment it needs.

Moreover, it appears the authorities will strengthen the Cabinet’s monitoring of electricity production numbers. This is because the policy included a call for the Cabinet to start receiving quarterly reports on total electricity production – calculated based on total distribution by province.

(Source: Jang Seul Gi, “North Korean authorities issue new policy for electricity generation,” Daily NK, February 16th, 2021.)

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North Korea’s economic growth in 2019

Monday, December 28th, 2020

By Benjamin Katzeff Silberstein

‘Tis the season for South Korean government estimates on North Korea’s economic growth… Maeil Business News

The North Korean economy grew for the first time in three years in 2019 following a sharp contraction in the previous two years, but its per capita income gap with South Korea widened further, the South Korean government data found.

According to a report released by Statistics Korea on Monday, the nominal gross domestic production (GDP) in North Korea rose 0.4 percent last year from the previous year to 35.3 trillion won ($32.2 billion). The growth came after the economy had shrunk 3.5 percent in 2017 and 4.1 percent in 2018 due to the poor crop yields and strengthened international sanctions.

South Korea’s nominal GDP in 2019 was 1,919 trillion won, 54 times greater than that of the North.

The statistics bureau said the increased output from construction, agriculture, forestry and fisheries and service sectors contributed to the overall economic growth of the reclusive regime.

North Korea’s per capita gross national income (GNI) was 1.41 million won last year, losing 20,000 won from 2018. It was one twenty-seventh of South Korea’s 37.44 million won. The per capita income gap between South and North Korea widened from 21 times in 2009, 23 times in 2015 and 26 times in 2018.

Crop yields in North Korea came at 4.64 million tons in 2019, higher than 4.38 million tons in the South. But the North’s rice output was 2.24 million tons, about 60 percent of that of the South.

Coal production increased 11.8 percent on year to 20.21 million tons last year.

North Korea’s trade volume totaled $3.24 billion in 2019, up 14.1 percent from the previous year when its trade shriveled 48.8 percent due to the United Nation’s sanctions.

Watches and watch components that are not subject to the sanctions accounted for the biggest share of 17.8 percent of its total exports, up 57.9 percent from the previous year.

Its biggest imports were mineral fuel and oil that took up 11.7 percent. Amid food shortage, grain imports soared 242 percent on year.

(Source: Choi Mira, “North Korean economy grows for first time in 3 years, per capita income falls in 2019,” Maeil Business News, December 28th, 2020.)

A few thoughts:

First of all, these are estimates based on models, not on rigorously gathered statistical data. That is not to criticize the statistical authorities that compile these figures, but it must be mentioned. These may well be the best estimates out there.

Second, a 0.4% growth is not much, especially considering the steep economic fall North Korea went through in the preceding years. News headlines tend to blow these figures up way beyond proportion.

Third, 0.4% does sound like a plausible number in many ways. Some of the metrics used to determine it may well be indicative of other things. Take increased coal production, for example. We know with a fair degree of certainty that (illicit) coal exports to China seem to have increased significantly during 2019, as well as during the present year. So an almost 12% increase in production compared to 2018 is not at all difficult to imagine.

So all in all perhaps a small uptick in 2019, but at the same time, from a very low level.

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North Korean coal trade: the questions that really matter

Tuesday, December 8th, 2020

By: Benjamin Katzeff Silberstein

I have long argued, on this blog and elsewhere, that the question of North Korea and economic sanctions is not a binary one. We don’t have either perfect sanctions implementation with complete suppression of trade, or smuggling and trade under the radar, with or without the complicity of the Chinese government, making sanctions on North Korea meaningless. Rather, sanctions were never going to work perfectly to begin with — government measures rarely do. What sanctions do do, however, is to impose high additional costs to anyone trading with North Korea. North Korea would still import and export sanctioned goods to some extent, but reap lower revenues from exports and pay more for imports.

US intelligence claims over the past few months have contained some information that is highly relevant to that end. Ship-to-ship (STS) transfers are complicated and expensive, but it seems that this method of transferring North Korean coal to Chinese buyers has begun to decrease. Wall Street Journal reports (paywall) that direct deliveries to China, through the Ningbo-Zhoushan area, have increased in frequency over the past few months. Chinese ships have also gone directly to North Korea’s Nampo port to fetch coal deliveries.

The UN Panel of Experts noted this trend already in its March 2020 report:

67. Ship-to-ship transfers in the Gulf of Tonkin (see S/2019/691, para. 20) have decreased substantially in favour of increased deliveries to the Ningbo-Zhoushan and Lianyungang port areas in China. The increase reinforces the need for port and customs authorities to heighten scrutiny of vessels and their shipping documentation, and to impound any vessel suspected of transporting prohibited items.

We still don’t know how widespread such trade is, but it significantly lowers the transaction costs of North Korea’s coal trade, and thereby lessens the impact of sanctions on North Korea’s export revenue.

What about proportions?

  • According to the WSJ report and US intel sources, North Korea exported 4.1 million metric tons of coal between January and September 2020.
  • No one knows what North Korea paid, but the WSJ report assumes a price of $80–100 per ton in 2020. This places the value of the exports between $330 and $410 million.
  • Is that a little or a lot? Well, it depends. According to UN Comtrade figures, North Korea exported on average 1.7 million metric tons of coal per month to China in 2015. In contrast, 4.1 million metric tons between January and September gives close to half a million metric tons per month. In April 2016, coal exports totalled 1.53 million metric tons, to the tune of $72.3 million.
  • The WSJ figures place North Korean revenue at $36.6-$45.5 million on average per month for January-September. Using the 2016 April figure as a benchmark, it is absolutely not an insignificant number. At the same time, it is nowhere near — really, less than half by one measure — what North Korea has received for its coal exports in the past.

This by no means gives a perfect representation of the proportions at hand. After all, both 2015 and 2016 were boom years for North Korean coal exports to China. At the same time, judging from this limited data, we should not assume that things are back to normal only because China’s sanctions implementation seems to have begun to taper off. At the moment, it’s also very difficult to tell what proportions of the downturn in trade originates from North Korea’s own, self-imposed border lockdown, and from sanctions respectively.

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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.)

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North Korea’s 2020 parliamentary session and the budget: the main points

Tuesday, April 14th, 2020

By: Benjamin Katzeff Silberstein

This past Sunday, the 12th of April, the North Korean Supreme People’s Assembly met at Mansudae Assembly Hall, the grand, majestic room where the assembly sits. Out of the six items on the SPA’s agenda, at least three – half – dealt in some shape or form with the economy, and arguably, some others could also fit into that category:

The agenda items of the Third Session of the 14th SPA of the DPRK were decided at the session:

1. On adoption of the law of the DPRK on recycling resources

2. On adoption of the law of the DPRK on tele-education

3. On adoption of the law of the DPRK on providing living conditions for discharged officers

4. On the work of the Cabinet of the DPRK for Juche 108 (2019) and its tasks of Juche 109 (2020)

5. On implementation of the state budget for Juche 108 (2019) and the state budget for Juche 109 (2020).

6. Organizational matter.

(Source: “Third Session of 14th SPA of DPRK Held,” Korean Central News Agency, April 13, 2020.)

I include the Cabinet report given the strong emphasis over the past years of the cabinet’s leading role in economic management. A separate KCNA-report from the same day, “Report on Work of DPRK Cabinet for Juche 108 (2019) and Its Tasks for Juche 109 (2020),” summarized this report of the cabinet’s work. I paste it here with some annotating comments. Yes, the whole first paragraph below is one sentence:

According to the report on the work of the Cabinet delivered at the Third Session of the 14th Supreme People’s Assembly(SPA) of the Democratic People’s Republic of Korea (DPRK), last year the Cabinet organized a drive of putting the overall national economy on a new higher stage with a main emphasis put on accomplishing the sustained economic development, ensuring the local production of equipment, raw and other materials and revitalizing production by boosting the capability of independent development of the country, true to the important tasks set forth by Supreme Leader Kim Jong Un in his report at the Fourth Plenary Meeting of the Seventh Central Committee of the Workers’ Party of Korea and in his historic policy speech at the First Session of the 14th SPA.

None of these phrases (“local production of equipment” etc) are new or surprising, and the most notable fact is perhaps the absence of anything unusual in such an unusual time (coronavirus, sanctions).

The report said that last year all sectors and units of the national economy carried out the gross yearly industrial production value at 108 percent, and ministries, national institutions, the city and county people’s committees and industrial establishments over-fulfilled their national economic plan.

The electrical power industrial sector carried out the hydraulic power generation plan at 103 percent and made sure that production was increased by properly carrying on the repair and readjustment of generating equipment.

Now this is interesting – repairing and readjusting could either mean a claim that the industry is doing fine even without imports of Chinese machine parts and the like, because it can simply repair and readjust what’s already there. Or, it’s a claim that in fact, despite sanctions, the country’s industries are able to replenish whatever equipment it needs to stay afloat.

The thermal power plants provided a guarantee for stabilizing the electric power production without relying on heavy oil.

The coal industrial field respectively showed 23 percent and 22 percent increases in the coal production and the supply of coal for thermal power generation over last year, and the large-scale coal mines rich in deposits and with favorable mining conditions provided a foundation to increase coal production.

In the field of the metallurgical industry the Kim Chaek Iron and Steel Complex has shown 22 percent, 2 percent and 37 percent increases in the production of pig iron, steel and rolled steel over last year. The chemical industry achieved large growth in the production of chemical fertilizer, carbide and caustic soda.

Of course, any claims of over-fulfillment of quotas and the like should be taken with a grain of salt, as such claims are classical in North Korean propaganda regardless of their foundation in reality (the genre was born in the Soviet Union). Still, trying out a charitable reading, there are theoretical ways in which claims over over-fulfillment could technically be true, particularly in these sectors. We know nothing about the revenue of these products, for example, and mines and factories could churn out production in great magnitudes but with questionable value when the products can’t be exported or sold at a profit at all. Because coal prices have dropped so much under sanctions, industry could well be powered at a lower cost, but the value of this is, again, questionable.

[…]

On the agricultural front the peak-year level was exceeded in the grain production even under unfavorable weather conditions.

A repetition of the claim of a bumper harvest last year, which remains highly unlikely, as I argued here.

A fishing campaign for supplying more fish to the people was launched in the fishery sector, and the fishing was put on a higher scientific level with the help of the updated aid system for detecting fishing ground.

Again, the sector may certainly produce and supply more, but its incomes will still be lower than they would be without sanctions.

The field of the land and environment protection turned the important projects including the Wonsan Kalma coastal tourist area and the Yangdok Hot Spring Resort into thick woodland and greenery and face-lifted all roads including Pyongyang-Hyangsan and Pyongyang-Wonsan Motorways.

A hint that investment continued in the tourism industry, and that the state expects this industry to blossom in the future, despite the currently dire situation. By extension, perhaps also a suggestion of expected solid economic ties and exchange with China.

The report contains a great deal of interesting detail, but in the interest of time, I’ll skip ahead to the most central parts (my own emphasis):

The report emphasized that all the achievements made last year clearly proved once again that as long as there is the wise guidance provided by the Party, we can live on our own and open up the road of our own development and prosperity no matter how desperately the enemies may try.

The report also said that serious mistakes were found in the work of the Cabinet last year.

They taught a serious lesson that if the officials in charge of providing economic guidance fail to fulfill their duty, it would be impossible to successfully attain the goals of economic construction set forth by the Party, the report said.

It clarified that we face heavy yet responsible tasks to unconditionally and thoroughly carry out the economic construction tasks set forth at the 5th Plenary Meeting of the 7th Central Committee of the WPK under the uplifted slogan “Let’s Break through Head-on All Barriers to Our Advance!”

It went on:

The Cabinet will put a main emphasis on organizing the economic work on the principle of subordinating everything to the health and safety of the people, conducting courageous head-on breakthrough in the spirit of achieving prosperity by dint of self-reliance, and fully meeting the needs for the national economy and for the people’s living by readjusting the economic foundation of the country and by fully tapping the production potential, in order to thoroughly carry out the tasks set forth in the joint resolution of the WPK Central Committee, State Affairs Commission and the Cabinet.

The Cabinet will rationally readjust the economic work system and order and boost its role as the organizer of the state economy.

It will put efforts into holding full control of the resources and fund sources of the state, and securing financial ability and execution power capable of managing and operating the country’s economy in a unified manner.

There are some key phrases below as well, but these two paragraphs are especially noteworthy. The message seems fairly clear that the state’s role in the economy needs to get stronger, and that while independent management methods may certainly be encouraged, the state is in charge. This message is familiar from Kim Jong-un’s December CC Plenum speech.

It will establish a strict discipline for the state development and use of the underground natural resources that are of strategic significance in the state economic development, and also take strong measures to protect and multiply aquatic resources.

It will bring about innovation in the work system, order and method on the principle of ensuring smooth transaction in the overall trade, and thoroughly guarantee the economic benefits of the country through the application of strict discipline and order in the import and export.

Perhaps both a reference to easing some rules and regulations for trade, while also combatting the rampant trade deficit?

[…]

The coal industrial sector will fully meet the demand for coal from several fields of the national economy including electricity, metal and chemical industries.

Note the absence here of any reference to coal exports.

[..]

The light industrial field will expand the variety of daily necessities and boost their quality. It, regarding the local production of raw and other materials as the lifeline, will rely on the locally available raw and other materials as much as possible for the production of consumer goods, put efforts into the development of local industry and contribute to the improvement of people’s standard of living.

Making consumer goods production and supply more local, and less reliant on imports, has been one of the chief goals through Kim Jong-un’s tenure. Judging by, for example, this recent report about consumer choice in kitchen items, it seems to be going quite well.

The Cabinet, corresponding to its position and duty as the economic command, will ensure the definite provision of unified operation and command for implementing the economic policies of the Party, and guarantee the meticulous economic organization and persevering practices and thus fulfill its responsibility and duty in glorifying this year marking the 75th founding anniversary of the Party as a year of victory to be specially recorded in the history of the country, the report stressed.

The report ends with one final emphasis on the Cabinet, and thus, the state, and not grassroots, independent actors, as the main holders of power in the economic realm. “The economic command” is about as clear of an expression as you could imagine. This doesn’t necessarily mean that the state will try to curb the market system anytime soon, but it will continue to subvert market forces into its own institutions where they can be more easily controlled and generate cash to the state.

The above is just a brief overview and quick read of the budget report. For more on the proportions and overall economic conditions that the report speaks of, check out Ruediger Frank’s recent 38 North article on the SPA session as a whole.

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How North Korea turns coal into gas, and what it might mean for sanctions

Tuesday, December 18th, 2018

By: Benjamin Katzeff Silberstein

Wall Street Journal has an interesting and thoroughly researched report out today, on North Korea’s use of a technique to synthetically produce synthetic fuels from coal:

China, North Korea’s longtime ally, has provided technology and expertise for the coal-conversion efforts, according to Chinese companies. One said in July that it is supplying a large coal gasifier designed to produce 40,000 cubic meters an hour of synthetic gas to an industrial zone north of Pyongyang.

That output alone would be enough to produce synthetic fuels equivalent to about 10% of North Korea’s annual imports of crude and refined oil in recent years, according to David Von Hippel, an expert on North Korea’s energy sector at the Nautilus Institute.

[…]

It has become cheaper in recent years—in part because of Chinese development of the technology—and remains viable for countries with abundant coal and few alternatives.

North Korea obtained German coal-gasification technology from the Soviets around the 1960s but did little to develop it, and became dependent on subsidized crude from Russia and China.

[…]

Crucially, coal gasification has helped provide raw materials to increase output of fertilizer and plastic sheeting for greenhouses, boosting food production, and enabled other industries to develop products such as steel alloys and pipes, experts said.

The technology is also now used in small-scale power plants to boost electricity supplies, according to footage broadcast by North Korean state television in November.

One Chinese company, Hebei Kaiyue Group, said on its website that seven officials from North Korea’s Academy of Sciences visited one of its facilities in June to study how it converts coal to methanol, ammonia and dimethyl ether, which can be used as a diesel alternative.

The large gasifier slated for the industrial zone north of Pyongyang was built by Yangmei Chemical Industry Machinery Co. Ltd, a subsidiary of one of China’s biggest coal companies; it has been completed but not yet transported to North Korea, as the Chinese awaited North Korean instructions, according to two people involved. The company declined to comment.

Full article/source:
North Korea Turns Coal Into Gas to Weather Sanctions
Jeremy Page
Wall Street Journal
2018-12-17

I have a brief quote in the story, basically saying that even if North Korea can only produce fairly moderate quantities of gasified, synthetic fuels through this technique, it could potentially be very significant for the economy as a whole. This is particularly true for transportation and industrial manufacturing. The former is crucial not only for the state-side of the economy, but also for the private sector (i.e.: markets and entrepreneurs).

When trying to asses whether North Korea can “weather” sanctions or not, it’s meaningful to remember that the economy as such is still, partially, recovering from the near-complete collapse of the 1990s. So the quantities needed to make a significant contribution to industrial production may not be that massive. All of this is a way of getting at, in absence of actual numbers, how much this coal gasification technique may matter for North Korea. Putting together whatever oil and fuel North Korea can get through smuggling, regular imports, non-commercial transfers from China, and coal gasification, North Korea is probably muddling through sanctions relatively well, and better than many would have expected a year or so ago, at least in some respects.

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Electricity supply in Pyongyang keeps getting better as sanctions drag on

Wednesday, September 5th, 2018

By Benjamin Katzeff Silberstein

As North Korea’s economically crucial minerals exports are massively down (coal exports by over 70% in 2017 as compared with 2013, for example), some in the country see positive side effects. With coal not being exported, it is instead sent to the part of the country with the highest purchasing power after the previous exports recipients: Pyongyang, as the following article in Daily NK notes (as of now only in Korean, I believe). Electricity supply, indoor heating and warm water supply have all reportedly improved, at least in parts of the city, as a consequence.

This illustrates a crucial point on sanctions. They don’t hit all North Koreans equally, and whatever one may think of the efficiency and political justification of sanctions, the northeastern coal-producing regions are undoubtedly harder hit than the capital city. Daily NK:

최근 북중 접경지역으로 나온 평양의 한 주민은 5일 데일리NK와의 통화에서 “우리가(북한이) 여태까지 중국에 석탄을 수출하다보니 (화력)발전소를 제대로 못 돌렸었다”며 “하지만 이젠 동평양 화력발전소하고 평양(평천) 화력발전소에서 전기를 꽝꽝 만들어 평양으로 보내고 있다”고 전했다.

대한무역투자진흥공사(KOTRA)에 따르면 2017년 북한 광물 수출액은 대북제재가 본격적으로 시작되기 전인 2013년에 비해 64.7% 감소한 것으로 나타났다. 같은 기간 무연탄은 70.8% 감소한 것으로 조사됐다.

또한, 통계청에 따르면 북한의 화력발전 발전량은 2013년 이후 82억kWh에서 2016년 111억kWh로 37.9% 늘어난 것으로 나타났다. 2017년 북한 발전량에 대한 정확한 통계가 조사되지 않았지만 전반적인 발전량 상승 추이로 볼 때 2017년 북한 화력발전소 발전량도 상승했을 것으로 예측된다.

석탄의 내수용 전환과 전력 사정 개선은 난방 및 온수공급에도 영향을 미친 것으로 보인다.

평양의 대다수 가구는 열병합발전에 의한 난방으로 설계됐지만, 그동안 화력발전소들이 제대로 가동되지 않아 난방 문제는 항상 골칫거리였다. 그러나 최근 발전소 사정이 나아지면서 일부 세대에 난방이 공급되고 있는 것이다.

소식통은 “려명거리 같은 최근에 지어진 집들은 발전소 사정이 좀 나아져 온수 난방이 어느 정도 돌아가고 있다”고 말했다.

Full article:

Pyongyang resident: as sanctions stop coal exports, the electricity situation is improving [평양 주민 “석탄 수출길 막혔는데 전력 사정은 좋아져”]
Moon Dong-hui
Daily NK
2018-09-05

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North Korea exports coal as ‘Russian’ to get around sanctions

Tuesday, August 7th, 2018

Benjamin Katzeff Silberstein

Reports Radio Free Asia:

In a move aimed at evading U.N. sanctions, North Korea is exporting coal to foreign buyers by sending shipments first to Russian ports, where the coal is falsely labeled as Russian-origin, North Korean sources say.

The export of North Korean coal is strictly banned under international sanctions punishing Pyongyang for its illicit nuclear weapons program, but North Korea has now opened new routes for trade with Russian help, a trade worker in North Pyongan province told RFA’s Korean Service.

“As sanctions on North Korea came into effect a couple of years ago, export routes for coal were blocked,” RFA’s source said, speaking on condition of anonymity.

“So North Korean trading companies have been shipping coal to the ports of Nakhodka and Vladivostok in the southern part of Primorsky Krai, in Russia. North Korean coal is then disguised as having come from Russia and is sent on to other countries under fake documents,” he said.

Loading ports for North Korean coal were formerly at Nampo and Songrim, on North Korea’s west coast close to China, but have now been moved to Chongjin and Wonsan, on the country’s eastern coast close to Russia, he said.

“When North Korean coal arrives at Nakhodka, a Russian company records its time of arrival, the length of the ship’s stay in port, and the amount of coal taken off. They then create false papers including a statement of the coal’s quality,” he said.

With these documents declaring the coal to be of Russian origin, “North Korea now has no problem exporting coal to other countries,” he said.

“The name of the Russian company that my company has been working with is Greenwich, and is located at the port in Nakhodka,” RFA’s source said. “They ask for two dollars per ton to disguise North Korean coal as Russian, and the North Korean trading company pays them right away.”

Still in demand

Also speaking to RFA, a North Korean trade worker based in the Chinese border city of Dandong said that North Korean representatives based in South and North Pyongan provinces collect information on countries needing coal and act as brokers for its export.

“Coal from these western-district mines is very high quality, so there is still a demand for it from other countries even though sanctions are in force,” he said.

A 30 percent deposit from the buying countries is required before the coal begins to move, with 30 percent of the balance due when the coal leaves its Russian port. The remaining 40 percent is then paid when the coal arrives at its final destination, the source said.

“For this three-step payment process, the money is deposited in a “borrowed” Chinese bank account, with the North Korean trading company paying banking fees,” he said.

Some of the coal sent from Russia now goes to South Korea and Japan, RFA’s source said.

“But North Korean company names don’t appear on the shipping papers, so the North Korean trading firms aren’t worried at all,” he said.

Resolve questioned

South Korea’s foreign ministry on Tuesday dismissed allegations that a foreign-flagged ship seen earlier at Nakhodka had delivered North Korean coal to South Korea’s southeastern port of Pohang, claiming the ship’s cargo was of Russian origin, according to an Aug. 7 report by the Yonhap news service.

“Critics here question the left-leaning Moon Jae-in administration’s resolve to curb the transport of North Korean coal,” a source of hard currency for the sanctions-hit Pyongyang regime, Yonhap said.

“But the government has stated that it remains committed to strictly abiding by U.N. mandates despite inter-Korean reconciliation,” Yonhap added.

The United States has meanwhile pointed to what it calls credible reports that Russia is in violation of U.N. sanctions against North Korea, with Secretary of State Mike Pompeo on Aug. 4 urging full compliance with measures aimed at forcing the North to give up its nuclear weapons program.

Article source:
North Korea Exports Coal as ‘Russian’ in Bid to Beat Sanctions
Hyemin Son
Radio Free Asia
2018-08-07

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A Chinese ban on North Korean imports damages the North Korean economy

Tuesday, March 13th, 2018

Institute for Far Eastern Studies (IFES)

The North Korean economy is expected to face serious difficulties due to China’s ban on imports from North Korea. Having analyzed China’s sanctions against North Korea, KOTRA’s Korea Trade Center in Shenyang recently suggested that while North Korea depends overwhelming on China for its export, its exports are expected to plummet due to China’s measures.

After Pyongyang made its fifth nuclear test on February 18, 2017, China joined the sanctions imposed by United Nations Security Council (UNSC) Resolution 2321 and halted its import of North Korean coal until December that year.

Consequently, China’s import of North Korean coal was reduced by 60 percent compared to the same period in the previous year.

Furthermore, China imposed a complete ban on the import of coal, iron ore, lead and fishery products from North Korea, in accordance with the sanctions by UNSC 2371 adopted in response to North Korea’s IBCM launch on August 14, 2017.

Moreover, in response to North Korea’s sixth nuclear test on September 22 and the launch of an ICBM on January 5, 2018, China put a restriction on the export of refined oil, crude oil and refined petroleum products to North Korea.

The restriction on the export of refined petroleum products is expected to be a serious blow to the North Korean industry. Keeping China’s exports below 10 percent of total North Korean demand for the products, the new sanction will hit the North Korean economy across the board, ranging from industry, transportation, cargo transportation and power supply.

In addition, North Korean households, which have lower priority in power supply, would face increasing difficulties in getting electricity and heating. In the meantime, North Koreans may not suffer greatly from the shortage of oil because China has limited its export of crude oil to North Korea to its annual level of supply.

North Korea’s foreign exchange shortage is also expected to be aggravated following the shutdown of North Korean businesses in China and the repatriation of North Korean workers, both of which have been main sources of funds for the North Korean leader.

On September 28, 2017, the Chinese Ministry of Commerce announced that all existing North Korean businesses and joint ventures in China, including those managed solely by North Korean companies and individuals, should be closed by January 9, 2018.

In accordance with the notification of closure, the Shenyang Municipal Bureau of Industry and Commerce Administration issued a letter of notification to North Korean businesses and joint ventures in the city, leading to the shutdown of the Chilbosan Hotel and several North Korean restaurants.

In addition, North Koreans currently employed in China are allowed to remain while they have a valid visa, but have been asked to return to North Korea upon expiration of their visa.

Although the Chinese Ministry of Commerce completely prohibited the import of North Korean textile products on September 22, 2017, the import ban has created little export-ban effects to date, because cargo that has not completed the customs clearance procedure is excluded from the ban.

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