Surging Coal Prices Bring Windfall for N.Korean Regime

  • By Cho Yi-jun

    October 27, 2016 11:08

    Surging prices of coal are working against international efforts to sanction North Korea over its missile and nuclear programs.

    Coal is one of major products North Korea exports to China, accounting for over 40 percent of its total exports, and the rising prices are boosting funds for the North's weapons program. Trade volume in money terms between the two countries increased 3.4 percent on-year in the third quarter this year.

    "North Korean coal prices have surged by 68 percent in value recently... The average price of its anthracite coal arriving at major Chinese ports rose to US$99 a ton in recent weeks from around $59 in early August," the Wall Street Journal reported Tuesday.

    "In August, North Korea exported 2.47 million tons of coal to China, the highest monthly total on record. Exports slipped in September but remained higher than a year earlier." 

    The main reason is new mining restrictions in China to tackle overcapacity and supply disruptions after heavy rains there in July. Global coal supply has also dwindled because of shutdowns at two major coal mines in Australia.

    Chinese delegates attend a ceremony in Pyongyang marking the 66th anniversary of China joining the Korean War in this picture published by [North] Korean Central News Agency on Wednesday. /Yonhap

    Experts do not expect coal prices to cool off until the second half of next year. North Korea's coal shipments to China are rising because UN Security Council sanctions exempt transactions for "livelihood purposes."

    "Beijing is not going to go along with an effective coal embargo on North Korea because it hurts China too," the WSJ quoted an expert as saying. 

    Meanwhile, trading volume between the North and China amounted to about $1.55 billion in the third quarter, Voice of America reported the same day, up 3.4 percent from a year earlier despite the sanctions.

    During this period, coal was the top export item ($280 million), followed by men's coats ($87 million) and fisheries products ($67 million). The clothing exports have been cited as another example of loophole in the sanctions.

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