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Train Explosion in Hyangsan

Wednesday, December 12th, 2007

Daily NK
Jung Kwon Ho
12/12/2007

A source in North Korea informed the Daily NK on the 11th that there was a train explosion incident in Hyangsan, North Pyongan on November 12th that left 8 passengers dead.

The source said that “The train, traveling between Pyongyang and Manpo, was carrying a shipment of butane gas tanks when it suddenly burst into flames. It is speculated that the explosion resulted from a cigarette that was lit in the vicinity of a gas leak coming from the tanks, however this has yet to be confirmed.”

People use butane gas for lighters in North Korea and can refuel lighters at street stalls everywhere.

The source relayed that the Rail Safety Agents are undergoing interrogation, suspected of taking bribes in return for allowing traders to load butane gas tanks on the train. The wounded passengers were taken to the People’s Hospital of Hyangsan for treatment of their injuries.

According to the source this is the second serious explosion since last July. The first occurred at the “January 20 Munitions Factory” located in Eundeuk, North Hamkyung Province. Resulting from the ignition of large stores of gunpowder, it produced mass casualties.

The January 20 Munitions Factory manufactures trench mortars, cannon balls, anti-tank guided missiles and bombs for aircrafts.

The source reported that around 50 workers having their lunch died in the factory and around 100 workers were wounded. However, the numbers were relatively small considering that most of the workers had left the factory on their lunch hour.

Party authorities in Eundeuk considered this incident to have been the work of spies and started educating workers on anti-socialist activity. However, the explosion was later found to have been caused by an electrical fault.

Posted in Energy, Military, Natural Gas, Oil, Railways, Transportation | Comments Closed

GS Caltex to supply heavy oil to N. Korea

Sunday, October 28th, 2007

Yonhap
10/28/2007

GS Caltex Co., South Korea’s second-biggest oil refiner, said Sunday it is set to supply 21,000 tons of heavy oil to North Korea as part of a nuclear disarmament agreement.

The oil shipment will be sent later Sunday via the port of Yeosu, a port city about 455 kilometers south of Seoul, to arrive at the North Korean ports of Songlim and Sunbong.

GS Caltex and European oil trading company Vitol have recently won a tender issued by the U.S. Agency for International Development to supply a combined 50,000 tons of heavy oil to the North as part of the disarmament-for-aid deal.

Posted in Energy, International Aid, Oil, USA | Comments Closed

Oil price ‘grounds’ N Korea fleet

Sunday, October 28th, 2007

BBC
10/28/2007

North Korea has been forced to ground a fleet of Soviet-era military planes because of the high oil price, South Korea’s Yonhap news agency reported.

Fuel is being diverted for other training flights, Yonhap quoted a military source as saying.

The Antonov An-2 biplanes – of which North Korea’s air force is thought to have about 300 – are able to drop special forces behind enemy lines.

The planes, which can cruise below radar, carry some 12 soldiers.

North Korea’s impoverished economy has suffered from energy shortages for years, and rising oil prices have made the situation worse.

Low speed

The Antonov, designed and built in the Soviet Union, first flew in 1947, and is still used by a number of military and civilian operators around the world.

The plane is useful in special forces operations because of its extremely low minimum speed – it can fly as slowly as 48km/h (30mph) without stalling, according to aviation experts.

North Korea’s air force fields hundreds of aircraft, but the vast majority are ageing Soviet models – such as the MiG 21 fighter – or Chinese copies outclassed by more modern aircraft fielded by the US, South Korea or Japan.

North and South Korea are still technically at war as a peace accord to bring an end to the 1950-53 conflict has never been signed.

Posted in Aviation, Energy, Gasoline, Military, Oil, Transportation | Comments Closed

Two Koreas discuss oil exploration at summit

Friday, October 5th, 2007

Yonhap
10/5/2007

Leaders of the two Koreas discussed issues relating to oil field development and exploration at the latest summit in Pyongyang, South Korea’s top economic policymaker said Friday.

“The oil development issue was discussed at the summit, and North Korean leader Kim Jong-il expressed keen interest in the South’s oil field and gas exploration projects,” Finance Minister Kwon O-kyu said in a press briefing.

“South Korea also discussed the development of resources in North Korea, including oil fields.”

Kwon said the oil development issue may continue to be discussed at talks of the proposed Joint Committee for Inter-Korean Economic Cooperation, a committee to be formed through upgrading the status of the existing Inter-Korean Economic Cooperation Promotion Committee in an effort to accelerate bilateral economic cooperation.

Kwon played down concerns about potential financial burdens on the government from proposed inter-Korean business projects.

At the three-day summit, ended Thursday, the two Koreas agreed on a range of cross-border business projects, including creation of a special economic zone at the North’s western port city of Haeju, development of an existing port of Haeju, and expansion of an industrial complex in the North Korean border town of Kaesong.

The two also agreed to jointly repair and maintain the North’s dilapidated expressway linking Kaesong and Pyongyang, as well as the North’s railway between Kaesong and Sinuiju on the North’s western Chinese border.

The two countries also decided to construct an inter-Korean joint shipbuilding complex in Nampo, near Pyongyang.

South Korea will be able to finance the development of Haeju port through a proposed 2 trillion won (US$2.2 billion) overseas port development fund, which will be created by the nation’s port authority, Kwon said.

In a related note, Maritime Minister Kang Moo-hyun said in a meeting with reporters that about 220 billion won will be spent for the development of the port which will have eight berths, including two container berths.

The government will also able to attract international cooperation for repairing the railways since it is part of a wider international railway project of Trans-Siberian Railway, he said.

South Korean shipyards, which hold a combined 45 percent share of the global market, by investing in the envisioned shipbuilding complex will be able to maintain their competitiveness through access to North Korea’s cheap labor, Kwon said.

In case of the summit’s impact on domestic financial markets, Kwon declined to make concrete predictions, but said rising expectations of improving profitability and competitiveness by domestic businesses might be able to boost investor spirits.

Posted in Energy, Foreign direct investment, Inter-Korean summit, Natural Gas, Oil, Political economy, Railways, Sea shipping | Comments Closed

U.S. prepares fuel oil aid to North Korea

Thursday, September 13th, 2007

Yonhap
9/13/2007

The United States is preparing to provide heavy fuel oil to North Korea as part of incentives it pledged for Pyongyang’s denuclearization, the State Department said Thursday.

Sean McCormack, the department spokesman, said the notification this week to Congress of such intent was “done with an eye towards” North Korea fulfilling its commitments.

“What it does is, it prepares us in the case we do need to fulfill some commitments” on the part of the U.S., he said.

South and North Korea, the U.S., China, Russia and Japan are members of the so-called six-party talks that in February struck an agreement to eventually dismantle Pyongyang’s nuclear weapons and programs. The communist state would receive in return political and economic benefits, including diplomatic normalization with Washington and Tokyo.

One of the economic incentives is 1 million tons of heavy fuel oil to be provided by the five parties. South Korea already delivered 50,000 tons as North Korea shut down its primary nuclear facilities, fulfilling the first phase of the denuclearization deal.

The second phase requires North Korea to disable the facilities and declare all of its nuclear stockpile.

Reuters reported Wednesday that the U.S. administration sent the legislative notification this week, saying it was prepared to give North Korea US$25 million in heavy fuel oil.

According to the document cited by Reuters, the administration deems the initial progress in the six-party talks “sufficient justification to begin preparations for a first shipment by the United States.”

McCormack said while there is preparation, the actual aid is still predicate on North Korea’s fulfillment of its promises.

“If North Korea does in fact follow through on their commitments as stated under the understanding of that phase two commitment, then the other parties have some commitments,” he said. “This would be part of the U.S. fulfilling that commitment, although it’s not done yet.”

After a bilateral nuclear deal in 1994 between Pyongyang and Washington, the U.S. had annually shipped 500,000 tons of heavy fuel oil to the North as energy assistance. The shipment was stopped after the U.S. accused North Korea in 2002 of cheating by running a secret uranium-based weapons program.

Posted in Energy, International Aid, Oil, USA | Comments Closed

2nd Inter-Korean Summit and Prospects for Discussion of Economic Cooperation

Tuesday, August 14th, 2007

Institute for Far Easter Studies
NK Brief No. 07-8-14-1

The second inter-Korean summit meeting is coming up soon, scheduled to open on August 28 in Pyongyang, and interest is building regarding discussion on economic cooperation. It is true that the North is prioritizing political and military issues in order to shore up its government by normalizing relations with the United States. However, considering its serious economic woes, the ability of South Korea to offer a ‘gift package’ can significantly influence the success or failure of this summit.

It is not yet clear how economic cooperation will fit into the agenda, but Seoul and Pyongyang have been constantly discussing this issue, so some insight has been given. In particular, the ‘consumer’ North has been referring to domestic and international cooperation, and through Pyongyang’s requests, some clarity has been added to what goals could unfold during the upcoming meeting.

Energy Sector

The North Korean economy is saddled with severe shortages of electricity and fuel oil, causing production to slow and therefore stagnating consumption, putting the country into an ongoing vicious circle of economic depression. North Korea possesses facilities to produce 7.7 million kW of steam- and hydro-electric power, but in reality is incapable of operating these facilities at more than 30%.

The opinion that expansion of North Korea’s electrical infrastructure is necessary, not only for the North, but also for South Korea, is gaining strength. South Korean projects to develop North Korean mines and import its coal have been delayed due to a lack of electrical power. In the future, enterprises looking to set up in North Korea will also require a steady supply of electricity.

In what way the two Koreas will cooperate on energy is not yet known, but North Korea is sticking to its demand for light-water nuclear reactors. If construction were restarted on the reactors begun by the now-defunct Korean Peninsula Energy Development Organization (KEDO), North Korea could quickly have not only the energy production amount currently available, but an additional 2 million kW, as well.

North Korea’s power facilities are in a state of deterioration, but the number of facilities in the North are adequate for the current state of the economy, so a plan for the restoration of generation and transmission facilities, or the 2 million kW of electrical power offered by the South Korean government two years ago could be considered sufficient.

Natural Resource and Infrastructure Development

One other highly probable agenda item on inter-Korean economic cooperation will be development of natural resources. This is because a model in which North Korea’s relatively abundant underground natural resources are developed, and in which these resources being used by South Korean businesses, would create a ‘win-win’ result for both Seoul and Pyongyang.

According to a report given by the Korea Resources Corporation at a conference last year, North Korea possesses upward of forty different valuable minerals, including iron-ore. Analysis of these North Korean resources shows that a considerable amount of South Korea’s 40 trillion won (430 billion USD) worth of mineral imports per year could be brought in from North Korea instead.

As development projects in North Korea’s graphite mines are already underway, and the import of North Korean anthracite is being considered in order to meet quickly growing demand for charcoal in the South, cooperation in the natural resource sector appears to be one of the core points to inter-Korean economic cooperation.

As for North Korea’s railways, the heart of the country’s distribution infrastructure, completion of the section of track on the Kyungui Line between Kaesong Station and Moonsan Station, as well as the section of the East Sea Line between Mt. Kumgang Station and Jejin Station, means that the infrastructure for regular service between the two countries is now in place, although talks regarding the details of such regular service are not being held.

If regular service on these two lines between North and South Korea can be achieved, expensive transportation costs can be reduced, and of course, in the future, connection of the railway with continental rail networks such as the Trans-Siberian Rail and the Trans-China Rail would help to enable the Korean Peninsula to emerge as the hub of North East Asian distribution.

Furthermore, considering the fact that North Korea’s mining facilities and technology, as well as its ports, loading facilities, and other transportation infrastructure, are severely lacking, a plan linking development of natural resources to projects developing infrastructure also appears viable. It is also already known, to some extent, the nature of North Korean needs in its infrastructure sector, and if this upcoming summit closes successfully, it is expected that an inventory of these needs will become more concrete.

Vitalizing Kaesong Industrial Complex

The Kaesong Industrial Complex (KIC) is also an important undertaking. At the moment, a problem has arisen concerning the construction of a second KIC, but even if only the originally planned 26.4 million square-meter complex is built, the fact is that currently the first 3.3 million square-meter stage is complete, and considering that it employs North Korean labor, this is no easy feat. Companies moving into the KIC are asking that easy communication with South Korea and simplified import procedures be prioritized.

Posted in Dams/hydro, Electricity, Energy, Graphite, Institute for Far Eastern Studies, International trade, Iron Ore, Kaesong Industrial Complex (KIC), Mining/Minerals, Nuclear, Oil, Political economy, Railways | Comments Closed

N. Korea agrees to first denuclearize, receive benefits later: official

Wednesday, August 8th, 2007

Yonhap
Byun Duk-kun
8/8/2007

North Korea wants to receive various types of assistance, including development-aimed investment, in return for disabling its key nuclear facilities under a landmark denuclearization deal signed February, but it understands and agrees that the benefits could come a bit later than its steps to disarm, a South Korean official said Wednesday.

The North’s apparent concession removes a major hurdle to completing the denuclearization process before the end of the year, as the other countries in six-nation talks on ending North Korea’s nuclear ambition long believed the communist nation would never agree to get rid of its nuclear facilities unless incentives were provided before or simultaneously.

“The North Korean side said that even if its denuclearization steps are carried out in a short amount of time, and the provision of the promised energy and economic assistance takes relatively longer than its denuclearization steps, it will understand there can be a difference of time required and will exercise flexibility based on mutual trust,” a South Korean official told reporters, requesting that he remain anonymous.

North Korea took the position at a working meeting of delegates from South Korea, the U.S., China, Japan and Russia that opened at the inter-Korean border village of Panmunjom on Tuesday for a two-day run.

The talks resumed earlier Wednesday after the North’s delegation, headed by the country’s deputy chief of mission to the United Nations in New York, Kim Myong-kil, crossed the heavily fortified border to the South Korean side of the joint security area.

The main focus of this week’s meeting was to figure out how to ship by the end of the year the 950,000 tons of heavy oil or equivalent aid promised to the impoverished North in the February accord, a timeline insisted upon by the U.S., even though the communist nation has a storage capacity of only 200,000 tons a year.

Under the February agreement, signed by the two Koreas, the U.S., Japan, China and Russia, North Korea can receive energy assistance equivalent to 950,000 tons of heavy fuel oil in exchange for disabling its nuclear facilities at Yongbyon and submitting a complete list of its nuclear programs.

South Korean delegates earlier said that the first day of talks provided an opportunity to hear what North Korea wants, and that they anticipated more “in-depth” discussions with the North on what is within reach and how far the North should move toward denuclearization to get rewards.

North Korean delegates on Tuesday said their country wants to receive the promised oil, as well as what South Korean officials call “investment-based” assistance to help rebuild its dilapidated energy industry.

Pyongyang’s demand became clearer Wednesday, according to the South Korean official who spoke on condition of anonymity.

The North Koreans said their country wants to continue receiving 50,000 tons of heavy fuel oil each month, apparently until the end of the year, and the rest in “support and equipment for repairing and maintaining the North’s energy-generating facilities,” the official said.

South Korea has provided 50,000 tons of heavy oil to the North for shutting down the Yongbyon facilities as the first phase step in the February agreement, while Beijing, the host of the six-way nuclear disarmament talks, has reportedly offered to soon begin shipping the first 50,000 tons of the promised 950,000 tons in the second phase.

Pyongyang has said it will not completely denuclearize unless it is provided with enough benefits — including nuclear power plants.

South Korean officials who attended the two-day working meeting here said the subject never came up during the course of what the chief North Korean delegate, Kim, called “very productive and serious discussions.”

Posted in Energy, International Aid, Nuclear, Oil | Comments Closed

China to begin shipping heavy fuel oil to N.K. in mid Aug: sources

Sunday, August 5th, 2007

Korea Herald
8/5/2007

China will begin shipping 50,000 tons of heavy fuel oil to North Korea in mid-August as part of the 950,000 tons promised in exchange for the North’s disabling of its nuclear facilities in the second phase of denuclearization agreement, informed sources here said Sunday.

The agreement, signed February 13 by the two Koreas, China, Russia, Japan and the U.S., also commits North Korea to declare all of its nuclear programs.

South Korea completed Thursday the shipment of 50,000 tons of heavy fuel oil to the North in exchange for the North shutting down its nuclear facilities in the first phase of the denuclarization agreement.

“We understand China will begin providing 50,000 tons of heavy fuel oil to the North in mid August,” a diplomatic source here said. “A working group dealing with energy and economic aid slated for Aug.7-8 in Panmunjeom will decide on detailed measures of the provision.”

The working group is one of five groups launched under the February nuclear deal. Other groups deal with denuclearization, normalization of ties between North Korea and the U.S. and Japan and the establishment of a peace regime on the Korean Peninsula to replace the current armistice that ended the 1950-53 Korean War.

Posted in China, Energy, International Aid, Oil | Comments Closed

S. Korea completes oil aid shipment to N. Korea under six-nation nuclear accord

Sunday, July 29th, 2007

Yonhap
7/29/2007

South Korea on Sunday sent 22,590 tons of heavy fuel oil to North Korea, its last oil shipment to the communist neighbor under the first stage of a landmark nuclear disarmament deal.

Under a Feb. 13 deal signed with five other regional powers, North Korea agreed to shut down its nuclear reactor in Yongbyon in return for 50,000 tons of heavy fuel oil aid from South Korea.

The oil shipment, the fifth of its kind, left this southeast port at 1 a.m. and is to arrive at Sonbong Port in northeastern North Korea at 7 a.m. on Monday, South Korean officials said.

North Korea shut down the Yongbyon reactor after South Korea sent the first shipment on July 12. The February deal also calls for North Korea to disclose and disable all its nuclear programs in return for an additional 950,000 tons of oil or equivalent aid.

The six nations — the two Koreas, the U.S., China, Russia and Japan — met in Beijing earlier this month but the talks ended without setting a date to meet again.

Posted in Foreign aid statistics, International Aid, Oil, South Korea | Comments Closed

Oil Is Shipped to North Korea Under Nuclear Shutdown Pact

Friday, July 13th, 2007

NY Times
CHOE SANG-HUN
7/13/2007

A South Korean ship loaded with 6,200 tons of heavy fuel oil left for North Korea on Thursday under an agreement intended to end the North’s nuclear program.

The United Nations’ chief nuclear inspector said the North was expected to begin shutting down its main nuclear facilities early next week, after four and a half years of operation, during which time enough plutonium was thought to have been produced to make several atomic bombs.

The ship is expected to arrive at Sonbong, a port in northeastern North Korea, on Saturday, the same day a team of inspectors from the United Nations International Atomic Energy Agency is scheduled to arrive in the North to monitor and verify the shutdown.

Mohamed ElBaradei, the director general of the atomic agency, told reporters in Seoul that shutting down five nuclear facilities in Yongbyon, 62 miles north of Pyongyang, the capital, would not be difficult and should be completed “within maybe a month or so.” His agency and North Korea have already agreed on the procedures.

The shutdown would be significant because it would halt the North’s only declared program for producing fuel that can be used in nuclear weapons. The five facilities to be frozen in Yongbyon, including the country’s sole operating nuclear reactor and a radiochemical laboratory, can yield more than 13 pounds of plutonium a year, enough for one atomic bomb, according to experts.

But the steps to be taken after the initial freeze of the nuclear program remain “very much open questions,” Dr. ElBaradei said. Those include whether North Korea will provide the agency with a complete inventory of its nuclear materials, and when it might return to the Nuclear Nonproliferation Treaty.

“It’s going to be a very long process,” he said. “It’s going to be a complicated process. How smoothly the rest of the operation will go very much depends on how progress will be made in six-party talks.”

Chief envoys to the six-nation nuclear talks will meet in Beijing next Wednesday and Thursday, the Chinese Foreign Ministry said. The envoys, gathering for the first talks since March, were expected to discuss moves beyond the reactor shutdown.

North Korea agreed to shut down its Yongbyon facilities in a February agreement with the United States, South Korea, China, Russia and Japan. The deal called for shipping 50,000 tons of fuel oil to North Korea, and South Korea volunteered.

It plans to complete shipping the oil by early August, starting with the installment on Thursday.

North Korea indicated last week that it would undertake the long-delayed shutdown after the first shipment arrived.

When United Nations inspectors return to Yongbyon, they will face the same problems they had faced there before they were expelled in late 2002. They will put in seals, install cameras and leave monitors to ensure that the facilities remain shut. But they will not be allowed to collect samples or access North Korean data, much less travel around the country, to determine how much nuclear material North Korea has produced in Yongbyon or elsewhere.

The five-megawatt reactor in Yongbyon began operating in the mid-1980s. When suspicions about North Korea’s nuclear activities emerged in the early 1990s, a key dispute was how much plutonium had been produced at Yongbyon until then — 90 grams, about 3 ounces, as North Korea reported to the I.A.E.A., or up to 10 kilograms, about 22 pounds, as the agency suspected.

The dispute has never been resolved, although North Korea agreed to suspend operations at Yongbyon in an agreement with the United States in 1994. The accord collapsed in late 2002, when North Korea expelled the United Nations inspectors and restarted the Yongbyon operation.

North Korea has since claimed to have taken spent fuel unloaded from the reactor and reprocessed it into plutonium. Last October, it conducted its first nuclear test.

“It remains an unanswered question: how much plutonium has North Korea so far produced?” said Lee Un-chul, a nuclear scientist at Seoul National University. “North Korea won’t easily give up its operational data.”

Posted in Energy, Foreign aid statistics, International trade, Oil, Rason Economic and Trade Zone (Rajin-Sonbong), South Korea | Comments Closed

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