Posted October. 06, 2016 07:24,
Updated October. 06, 2016 08:38
Radio Free Asia (RFA) reported Wednesday that the Wanxiang Group is the largest importer of North Korean mineral resources, not the Hongxiang Group, which is under investigation for illegal trading with the North. The U.S-based news media cited an anonymous North Korea source in China as saying that Hongxiang’s imports of North Korean minerals were only a fraction of Wanxiang’s imports from the North.
According to the source, Wanxiang monopolizes mineral imports such as copper, tungsten and molybdenum from North Korea’s resources-rich Yanggang Province and has a contract with the North for exclusive rights to importing products from the Hyesan Youth Mine, the largest copper mine in the North, until 2026.
RFA quoted the source as saying that while several large Chinese corporations including Wanxiang secretly trade North Korean minerals, it has remained confidential what and how they are paying for the imports. After the United Nations announced in March sanctions on North Korea’s mineral exports, Chinese companies are capitalizing on the opportunity to buy them at cheap prices. The U.N. banned North Korea’s exports of coals, iron and iron ores with the exception of overseas shipments for the people’s livelihood. The North’s exports of gold, vanadium ores, titanium ores and rare earth were banned entirely.
The Wanxiang Group, China’s biggest automobile parts maker, makes billions of U.S. dollars’ worth of transactions with the United States, supplying its products to U.S. auto giants GM and Ford and purchasing or investing in some 20 U.S. companies. U.S. business magazine Fortune listed Lu Guanqiu, the group’s chairman, as the 10th richest person in China with assets of 65 billion yuan (9.7 billion dollars) in 2015. If such a global corporation is found to have made illegal transactions with the North, the ripple effects will likely be significant.
The U.S.-Korea Institute at Johns Hopkins University reported in 2010 that a total of 138 Chinese companies were registered in North Korea for business and that 41 percent of them had invested more than 500 million U.S. dollars in mining North Korean minerals.