By Nick Cunningham

LONDON, UK, November 2, 2017 (ENS) – North Korea may not have proven petroleum reserves, but it’s estimated that the secluded belligerent nation sits on reserves of more than 200 minerals, including rare earth minerals, estimate to be worth up to US$10 trillion.

Of course, there are no official reports on how much North Korea’s mineral wealth really is, but according to rough estimates from earlier this decade, Pyongyang’s deposits of coal, iron ore, zinc, copper, graphite, gold, silver, magnesite, molybdenite, and many others, are worth between US$6 trillion and US$10 trillion, as per South Korean projections reported by Quartz.

Kim

North Korean leader Kim Jung Un (Photo courtesy Wikipedia)

Before the fall of the USSR, North Korea had prioritized mineral mining and trade with fellow communist partners. But the mining industry has been in decline since the early 1990s, due to decades of neglect and lack of funds for infrastructure development to support mining activities.

Now North Korea’s mining sector trade is under a full ban by the United Nations, as Pyongyang has stepped up both nuclear missile tests and belligerent rhetoric in recent months. The UN started banning trade in metals last year, but there have been reports that Kim Jong-Un’s regime has grown increasingly inventive in circumventing sanctions.

The UN introduced in August a full ban on coal, iron, and iron ore, after having banned trade in copper, nickel, silver, and zinc in November last year.

China also implemented the coal import ban, cutting off an important economic lifeline of the regime. Coal trade has generated over US$1 billion in revenue per year for North Korea, the U.S. Treasury Department said at the end of August, when it slapped sanctions on Russian and Chinese entities for supporting the regime.

Following North Korea’s latest nuclear test on September 2, the UN Security Council banned the supply, sale, or transfer of all condensates and natural gas liquids, and banned Pyongyang’s exports of textiles such as fabrics and apparel products.

The latest sanctions, however, are not imposing a full oil embargo as the U.S. called for. The sanctions instead are capping refined petroleum products and crude oil supply, after the U.S. dropped its demand for full oil ban, to avoid China vetoing the UN resolution.

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Guard watches the movement of oil tank rail cars in North Korea, Oct. 1, 2014 (Photo by Lawrence Wang)

All the sanctions leading to these strongest prohibitions so far have been designed to stifle North Korea’s trade in minerals and cut off money for the regime.

North Korea has focused mostly on coal mining, the cheapest and easiest to mine, compared to precious metals or rare earth metals mining, for which Pyongyang has neither the funds nor the infrastructure or know-how to develop.

North Korea has sizeable deposits of some minerals. Its magnesite reserves are the second largest in the world behind China, and its tungsten deposits are likely the sixth-largest in the world, Lloyd Vasey, founder and senior adviser for policy at the Center for Strategic and International Studies, wrote in April.

North Korea sits on sizeable deposits of more than 200 different minerals, and “all have the potential for the development of large-scale mines,” Vasey said.

North Korea doesn’t have either the funds or the infrastructure to develop those resources. It’s also officially banned to export them.

Yet, “The Democratic People’s Republic of Korea is flouting sanctions through trade in prohibited goods, with evasion techniques that are increasing in scale, scope and sophistication,” a UN report of a panel of experts concluded in February.

“Diplomats, missions and trade representatives of the Democratic Peoples’ Republic of Korea systematically play key roles in prohibited sales, procurement, finance and logistics. In particular, designated entities are trading in banned minerals, showing the interconnection between trade of different types of prohibited materials,” the panel’s report reads.

The UN experts said in February that North Korea had adapted to the stricter sanctions “through various tactics, including identity fraud.”

“Their ability to conceal financial activity by using foreign nationals and entities allows them to continue to transact through top global financial centres,” states the UN panel’s report.

According to a more recent investigation by the Australian investigative journalism program “ABC Four Corners,” North Korea has business interests in Asia, the Middle East, and even Europe, contrary to the common perception that it is a very isolated country.

Office 39, one of the departments of its Workers’ Party, is “the ultimate slush fund,” reportedly generating up to US$1.6 billion annually for Kim’s lavish lifestyle, while 70 percent of the North Korean people are food insecure.

Andrea Berger, associate fellow at the Royal United Services Institute, told the program, “North Korea is very sophisticated in concealing the fact that it is, indeed, North Korea doing business overseas. It’s good at hiding in plain sight.”

{By Nick Cunningham of Oilprice.com, republished with permission}

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