Tue, Dec 05, 2017 - Page 6 News List

North Korean coal piling up after ban

LOGISTICS:RasonConTrans ships Russian coal to North Korea for transshipment to China, but is careful to keep it separate from the North’s own coal, which is barred

AFP, RASON, North Korea

A mound of North Korean coal is piled up on Nov. 21 adjacent to the RasonConTrans coal port at the harbor in the Rason Special Economic Zone in North Korea.

Photo: AFP

A 3m high metal fence topped with razor wire in a North Korean port marks the front line of the UN’ ban on coal exports by Pyongyang.

A mountain of North Korean coal — which would once have been bound for China — is piled up on one side of the barrier in Rajin harbor, stranded by the interdiction.

On the very next dock, about 2 million tonnes of Russian coal has come in by train and been shipped on to China this year by Russian port operator RasonConTrans.

Its activities are specifically excluded from the UN Security Council’s sanctions resolutions, but attempts have been made to use it as a way to bypass the restrictions.

“They asked, but we said no, we don’t do it,” RasonConTrans’ deputy director Roman Minkevich said.

The black mounds on the neighboring wharf were evidence his firm was complying with the rules, he added.

“Behind the fence it’s [North] Korean coal, it’s under sanctions now so it’s still here,” he said.

He declined to elaborate on the source of the requests.

“People,” he said. “Different people.”

The UN Panel of Experts on North Korea said in its midyear report that Pyongyang has been “deliberately using indirect channels to export prohibited commodities.”

For years the coal trade was a lucrative earner for Pyongyang — China imported 22 million tonnes worth nearly US$1.2 billion last year.

However, while Beijing says North Korean imports have come to a halt, RasonConTrans’ business is booming.

Since starting operations in 2015 its volumes have doubled each year, and Minkevich is targeting 3 million tonnes next year, with a goal of 5 million in future.

It has between three and six ship movements a month at its pier — No. 3 in the port, which can take vessels up to 180m long — loading 50,000 tonnes of coal on each, most of them heading for Shanghai.

Two large bronze statues of the North Korea’s founder Kim Il-sung and his son and successor, Kim Jong-il look out over Rajin.

Using North Korean labor — women are particularly skilled crane operators, Minkevich said, probably due to their care in performing repetitive tasks — costs at Rajin are 30 to 40 percent cheaper than at Russian ports.

Those competitors on the Russian Pacific coast are also close to capacity, he said, as China and the energy-hungry, but resource-poor economies of Taiwan, Japan and South Korea suck coal from Russia’s vast reserves.

RasonConTrans is 70 percent Russian-owned, with 30 percent held by the port of Rajin. It is the third-biggest taxpayer in the Rason Special Economic Zone, set up by Pyongyang to try to attract trade to the area where North Korea, China and Russia meet.

RasonConTrans has about 300 North Korean personnel and 110 Russian staff, and brings in much of its needs, such as diesel for its generators, directly from Russia.

It is almost entirely independent of the rickety local electricity supply, which Minkevich said was offline around 30 percent of the time.

Some aspects of the North reminded him of the former Soviet Union, he said, but working under the sanctions regime was a “unique experience.”

There were difficulties importing parts and building supplies, and “much more paperwork,” he said. “It’s interesting, but it’s hard.”

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