GoodFriends: Research Institute For North Korean Society

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North Korea Today No. 432 December 7, 2011

[“Good Friends” aims to help the North Korean people from a humanistic point of view and publishes “North Korea Today” describing the way the North Korean people live as accurately as possible. We at Good Friends also hope to be a bridge between the North Korean people and the world.]
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North Korean Mineral Sources As A Win-Win For Both North And South Korea.
Crisis Over Fuel Shortage Put On A Brake On Coal Export.
Will Reducing Coal Exports Relieve The Power Crisis?
Life Of An Aged Coal Miner Couple
3000 Won For A Kilogram Of Rice In Pyongyang

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North Korean Mineral Sources as as a Win-Win for Both North and South Korea
The reason for the lagging production of coal in North Korea is due to the lack of electricity, aged facilities and infrastructure. Shortage of electricity supply causes ineffective production of coal, and without coal, it is impossible to run thermal power generators. Yet, the amount of coal export increased. Uncontrolled coal export will lead to electric power shortage. This is the reason why government put on the brakes on further coal exports. Also, investment in coal mines by China did not live up to the expectation. Even if the quality of coal is high, no business is willing to foot the bill to upkeep the road, arrange transport, and manage facilities and materials involved with coal mining and export. Furthermore, missing deadlines for delivery and doubling up supply contracts with different partners are affecting the mines’ ability to meet the demand. Without improving the system, attracting investment will be difficult, and without investment, productivity cannot be improved; further, the lack of domestic supply will not help electrical power shortage. This vicious circle, however, can be overcome. North Korean mineral sources are a god candidatre to serve as a platform for North and South cooperation. North Korean government should work on building trust among related parties by improving its convoluted system, and South Korean government should administrate North Korean resources with long-term goal.


Crisis over Fuel Shortage Put on a Brake on Coal Export
North Korean government started to put on a brake on the coal export in those cases where it has handed over its coal mining concession and administrative development rights to China. For more foreign currency, it has been exporting domestic coal supplies, but recently an awareness over the crisis of speedy coal depletion has been raised. It reduced the export amount of coal recently, which goes much farther than its original plans to merely curtail the awarding of more mining rights. The reduction in export cannot be confirmed clearly as contracted export deliveries still continue, but it is expected that coal export will drop to one-tenth of the current amount. One official in the Central Party said, “We are not proposing a ban or limit on resource export. This doesn’t apply to those companies tha already has contracts or has already been awarded mining rights. We have decided that minerals such as iron ore, bronze and silver are still open to investment bids, but we won’t be granting operational rights to the mines. We will see how this goes. But if we block everything, the source of foreign currency will dry up, so we limit the export limit only to coal. He also added that there is no other alternative option other than mineral export in this time of economic hardships.


Will Reducing Coal Exports Relieve the Power Crisis?
According to Party officials, the recent policy of reducing coal exports is in response to the worsening power crisis. The power shortage in North Korea has been exacerbated by the export of coals normally used for domestic consumption. There is no alternative way to address this issue. Higher productivity of coals mines cannot expected without foreign investments, and most of coals that are currently produced are sold to China.

One of the Central Party officials said, “To ease the severity of the power shortage, workers in power plants are working hard. But the plants are not fully operational because supplies for the facilities are not guaranteed, especially coals. The Central Party has demanded workers in coal mining industry to increase coals output. We know it’s not a perfect condition to produce more coals, but, as the only solution, workers are requested to work diligently with a sense of responsibility to the power crisis, rather than just being idle until working conditions get better. The Party insists on the workers to be the driving force of the Revolution. After all, it lies upon the workers. Even though we said that the coals supply to thermal power plants should be guaranteed, nothing has been changed as a policy, but reducing the export of coals has been just announced. We said that this is the necessary measures to relieve the shortage of coals for domestic consumption and fast exhaustion of coal reserves. However, the main reason is more likely that there is no actual investment in North Korea. Chinese investments focus just on the border area. Companies are actively investing in the border area since roads and railroads are constructed and electricity is easily supplied by the Chinese government, but it’s very passive in the inside of North Korea. It’s difficult to produce more coals without foreign investments. I am lost where and how we should start first since we have to address so many challenges before we to the power crisis”. He sighed hopelessly.


Life of an Aged Coal Miner Couple
Workers at the coal mines work day and night under life threatening circumstances regardless of age or gender The coal mines which are referred to as People’s Mines are extracted using labor teams organized by neighborhoods or families, who dig using vertical shafts as a unit. The dug up coals are called ‘self-coals’ or ‘People’s coals.’ Hak Sung Song, who turned seventy this year, mines for a living at a coal mine in Saebyul District, North Hamgyong Province. He is sought out among the youths for his ability to build shores while digging. Song can also detect locations of coal seams like no other. This sustains him because the young workers share their coals with him in exchange for his skills. His wife earns money by waiting by the pit’s mouth and transporting the extracted coal on her back. On their days-off, the couple sells their coal for profit. The neighbors view the old couple approvingly, praising them for the diligence they show despite their age.


3000 Won for a Kilogram of Rice in Pyongyang
Price of rice in Pyongyang shows no sign of going down from the current 3000 won per kilogram. A kilogram of rice was traded for as much as 3,800 won in early November. Corn cost 2,300 won, equivalent to the cost of the rice in other regions. The price usually falls around this time of the year as food is brought in from Hwanghae and South Pyongan Provinces, but this year the food production has taken a nose dive in North Korea’s granaries. The price remains around 3,300 won although the harvest has ended and the food has been brought in. Corn price on the other hand, has dropped drastically from 2,300 won to 1,300 won because corn is released in the market more frequently than rice. In North Hamgyong Province, which suffered less damage from the heavy rain, the price of rice dropped from 3,600 won to 2,900 won in Chungjin, and 2,700 to 2,800 won in Hoeryong. Corn is sold for around 750 to 760. Other provincial cities share similar prices.


Comparison of Pyongyang food prices and dollar as of late November, 2011
1 dollar 3,450
rice (kg) 3,200
corn (kg) 1,700
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