NK deal to allow Chinese company to develop 3 mines

North Korea announced Thursday that it has signed a contract allowing a Chinese company to develop three mines in the country.

According to a report announced through the website of the North’s Chosun Korea Investment Office, the contract is for the development of one gold mine and two iron ore mines in North Korea with Beijing Bao Wian Hung Chang International Trading Ltd. The investment office of North Korea opened a Beijing branch of the Joint Venture Investment Committee, the Stalinist country’s main body for foreign investment inducement.

With the North’s export of natural resources surging every year, fears have risen that the plan for new mine development in North Korea could accelerate the outflow of natural resources from the reclusive country. China owns 51 percent of Hyesan Chongnyon Mine, which is considered the North`s largest copper mine, and has the right to mine the iron ore Musan Mine for 50 years.

The volume of minerals China imported from North Korea increased from 2.48 million tons in 2008 to 3.73 million tons in 2009 and 4.80 million tons in 2010. The figure from January to September last year nearly doubled to 8.42 million tons.

A source at the South Korean government said, “Detailed terms of the investment have not been publicized, but the two sides seem to have signed a memorandum of understanding,” adding, “The North has abundant natural resources but lacks the needed infrastructure to mine minerals. It has had a few cases of successfully implementing joint development with foreign companies.”

will71@donga.com