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Buoyed by record world prices for rare earth elements (RREs), North Korea has begun seeking deposits on its territory to help with its chronic international trade and budget deficits.
China is currently responsible for the production of over 90 percent of the world’s output of RREs.
In February China's exports of rare earth metals burst through the $100,000 per-ton barrier, a nearly 900 percent increase in prices from a year before, Asahi Shimbun reported.
According to an article in The Choson Sinbo, the newspaper of Tokyo's General Association of Korean Residents in Japan (Chongryon), North Korea has discovered rare earth element deposits of about 20 million tons. Choi Kyung-soo, who heads North Korea Resources Institute in Seoul, said that North Korea is estimated to have deposits of more than 17 million tons.
In about 1990 North Korea built a rare earth reprocessing plant in Hamhung, but since then it has been unable to put the plant into full operation because of shortages of power and supply.
North Korean exports of RREs to China generated $16 million in income in 2009, according to Dong Hwan Kim, a former lecturer at the University of South Australia. In 2010 North Korea earned $13 million for RRE exports of about 400 tons. Kim said, "As long as China invests in North Korea, exports could expand to more than several thousand tons."
By. Charles Kennedy, Deputy Editor OilPrice.com
Charles is a writer for Oilprice.com