It’s billed as potentially the largest deposit of rare earth minerals in the world. Unfortunately, it’s in North Korea, the world’s most isolated regime. Exploration is set to resume in April at the Jongju deposit by a joint venture between the North Koreans and SRE Minerals, a private equity firm from the British Virgin Islands.
In December, the joint venture – Pacific Century Rare Earths Minerals, Ltd. – announced initial exploration results pointing to a world-beating deposit. Some press accounts have posited that it could prove a game-changer for the Kim regime’s efforts to develop the country’s nonexistent economy. But it remains to be seen whether the North is just playing games with this effort or is really interested in pursuing an economic opportunity.
“It’s been no secret that they have a lot of rare earths,” says our correspondent in Seoul. “The fact that we’ve known about it for so long and nothing has really come of it I think says something about North Korea – that they’ve got a terrible economy and they’ve got all this marketable resource, but they can’t manage to get it together to do anything with it and make any money from it.”
A previous Chinese iron mining project highlights the difficulties at hand. A Chinese firm, Tianchi Industry and Trade, bought extraction rights for 50 years in 2005. The company, however, could not get the North Koreans to live up to their end of the deal in terms of laying railroad track and pipelines to ship the ore. By late 2012, the company simply pulled out, losing the money they put into the investment.... For the rest of the story, continue reading at our new business publication Monitor Frontier Markets.