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Mineral Resources in DPRK

Mineral Resources in DPRK. KOREA ENERGY ECONOMICS INSTITUTE. Woo Jin Chung 26th, Jun 2006. Contents. Overviews of the Mineral Industry Situation of Selective Minerals The problems of Mineral Industry. Ⅰ . Overviews of Mineral Industry. 1. Reserves of Mineral Resources.

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Mineral Resources in DPRK

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  1. Mineral Resources in DPRK KOREA ENERGY ECONOMICS INSTITUTE Woo Jin Chung 26th, Jun 2006

  2. Contents Overviews of the Mineral Industry Situation of Selective Minerals The problems of Mineral Industry

  3. Ⅰ. Overviews of Mineral Industry 1. Reserves of Mineral Resources • The value of 20 mineral resources in DPRK is estimated to be 24 times more than that of ROK - Reserved more than 360 kinds of minerals • DPRK reserves are not on the world-wide scale, but enough for its economic development - Reserve of Magnesite is known to be the first in the world(10%) - Minerals within 10th in the world : ※ Tungsten, molybdenum, graphite, gold, barite, fluorite, mica

  4. Ⅰ. Overviews of Mineral Industry 2. Production of Mineral Resources 1990=100 • The productions of almost minerals have declined since the middle of the 80 - Scarcity of electricity and other energy, materials for the production - Heavy floods in the middle of the 90 • The productions have recovered since 1999, but very slowly

  5. Ⅰ. Overviews of Mineral Industry 3. Export of Mineral Resources • The mineral is most important export commodity in DPRK - Accounting for 10∼15% of total export - Exporting mainly to China, ROK and Japan (intermittent exports to other countries) - Major export minerals: Iron, Copper, Magnesite Source: KOTRA(Korea Trade Agency) • The mineral is major export commodity to ROK - Accounting for 17%∼21% of total export to ROK (Total export : 200∼300million USD) - Mineral share is increasing over years - Major export minerals to ROK: Zinc, Gold, Magnesite ( the export amount of each export mineral is irregular over years) Source: Korea Minstry of Unificaion, 2006

  6. Ⅰ. Overviews of Mineral Industry 4. Policy on the Mineral Industry • The mineral industry has a great influence on the development of DPRK’s economy. - High GDP share and important source for foreign currency Source: Bank of Korea • Establishment the system of self reliance on the raw materials for “Juche” economy - Giving priority to mineral productions over manufacturing industries - Emphasizing the development of their own technology for exploitation of mines • Limited open the investment of mines to foreigners since 2002 • Administration for minerals - Coal : Ministry of Coal and Electricity Industry - Other minerals : Ministry of Exploitation Industry

  7. II. Situations of Selective Minerals 1. Iron • State of Supply • The number of mines : 41 (lagest mine : Musan, located in North-East) • State of steel manufacturing • 6 steel manufacturing factories in DPRK • Small scale facilities • Conventional technologies - Old DPRK’s own technologies fit to irons produced in domestic mines • Capacity imbalance of steel production process - molding> smelting> rolling (pressing)

  8. II. Situations of Selective Minerals 2. Copper ore • State of Supply • The number of mines : 23 (lagest mine : Heisan, located in Middle-North) • State of Refining • 4 copper ore refining factories in DPRK • Small scale facilities - North : 25-40 thousand ton per facility - South : 510 thousand ton (one refining facility)) • Conventional technologies - Old DPRK’s own technologies

  9. II. Situations of Selective Minerals 3. Lead & Zinc • State of Supply • The number of mines : 33 (lagest mine : Geumduk, located in North-South) • State of Refining • 7 refining factories in DPRK(Dancheon, Munpyung and etc) • Small scale facilities - North : 287 thousand ton on 7 facilities - South : 600 thousand ton on 2 facilities • Conventional technologies - Old DPRK’s own technologies

  10. II. Situations of Selective Minerals 4. Gold • State of Supply • The number of mines : 51 (lagest mine : Woonsan, located in North-West) • State of mining production • Reserve could be increased with more exploring • The pits of most mines are getting deeper due to long period productions - The productivity is low with old equipments, but could be highly improved when modern equipments are employed • The mines are strictly controlled by DPRK military - Foreign investments has been open since 7.1 economic revolution

  11. II. Situations of Selective Minerals 5. Non-Metallic Mineral • State of Supply(2004) • The scales of most nonmetallic mineral mines are small - many mines were developed to supply the minerals for the area of mines • The productions has not been increased since the early 2000 - Shortages of electricity, old equipments and water in pits

  12. II. Situations of Selective Minerals 5. Non-Metallic Mineral (continued) • Comparison of Related Industries to nonmetallic minerals ( Cement, Ceramics, Glass-making, Fireproof materials .. )

  13. III. Problem of Mineral Industry 1. Problems in industry production • Scarcity of electricity, materials and old equipments - Decreasing the production and stopping the operations of mines • Many mines but a few competitive mines - Almost mines are small and have deep pits due to long-time productions • Qualities of minerals uncertain • Old and small steel-manufacturing and refining mineral facilities - DPRK technologies fitting to the minerals produced in DPRK ’s mines - Many facilities but small unit scales • High potential to increase the production of minerals when new equipments are employed and electricity is supplied in the mines

  14. III. Problem of Mineral Industry 2. Problems in Investment • Requiring huge indirect costs for reconstruction of infrastructures such a s harbor and railroad in developing mines - Might need new power plants for stable electricity supply - Difficulties in moving the materials even within the region of DPRK • Uncertain qualities and few information on the mineral resources - Strictly closed to the mining information - No permitted to conduct any investigating on the quality of minerals without promising the investment • Difficulty in closing the mines even when the quality of minerals produced is low and no marketable. - By law(25 provision, article of underground resources), all of the resources in the mine should be dig up, disregarding the quality of minerals produced • No permission to the foreigner in engaging management of joint companies. - Just providing materials and equipments in exchange of a part of the minerals the invested mine produces

  15. Thankyou!

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