The Trillion Dollar Battle Over North Korea's Rare Earth Elements Is Just Beginning
Click here to read the full article.
You should note the following: It is no exaggeration to take into account that the "art of negotiation" also applies to rare earth elements. If Washington does not take North Korea's rare earth resources seriously, the winner could again be Beijing. Moscow could also benefit from Washington's loss as China continues to need access to energy resources in Russia and Central Asia, as well as Russia's advanced military technologies.
When considering current geopolitics, questions about energy and related resources are often the key to the struggle for influence among the world powers, as energy can drive or increase the underlying tensions. Today, the attractiveness of traditional oil exploration is losing ground as new energies and technologies emerge, which are often produced by “rare earths” and the elements they contain.
The DPRK may have a high concentration of rare earth elements, but since it is a withdrawn country, it has not yet exploited these resources, which could disrupt the current global order. Just as the Cold War divided the world ideologically, this new resource struggle will create gaps between those who have access to rare metal resources and those who do not. With entire industries built on a few rare metals, supply disruptions can have a profound global impact and give some countries enormous leverage.
Erbium, thulium, cerium, samarium, lithium. . . These are some of the elements under the “Rare Earth” label. Many of the technological advances that have been made in recent decades are derived from the seventeen elements of the periodic table.
Rare earth elements are also an essential part of the armaments industry. "Neodymium" is used to manufacture bombs, lasers, radars and sonars, "Dysprosium" for missile guidance and video systems and "Terbium" for electric motors. The United States has the third largest reserve in the world with the Mountain Pass rare earth mine in California. This mine was the world's leading producer until the 1980s. At that time, China entered the element market and created an almost global monopoly. The main factors in this market takeover were the availability of cheap labor and the lack of concern about environmental and working conditions. China is currently estimated to control more than 95 percent of the world's rare earth mineral production with approximately fifty-five million tonnes of deposits.
Recent studies suggest that North Korea may have the world's largest rare earth reserves. These deposits cannot currently be used due to lack of demand and crippling sanctions. The country is cut off from the foreign markets and has not yet developed a society based on mass consumption. Today's new projects require more experienced infrastructures, which increases project start-up costs, increases operating costs, and leads to the production of more expensive metals - an investment that North Korea cannot afford.
The Jongju site in North Korea contains almost 216.2 million tons of rare earth oxides, twice as much as the known world reserves. In terms of monetary value, South Korea estimates the value of its North Korean neighbor's mineral resources at $ 2,800 billion, if these numbers are correct. By comparison, South Korea's GDP was about 1,530.75 trillion in 2017. According to the Korea Resources Corporation (KORES) report, North Korea could contain large quantities of magnesite (six billion tons), graphite (two billion tons) and iron, ore (five billion tons) and tungsten (250,000 tons). The country could become a major player in the rare earth industry as demand for smartphones, semiconductors and related products is highest. Pyongyang said it could use up to twenty million tons of these seventeen elements, with China being the potential buyer. Rare earth metallurgy is also essential for weapon systems in the United States, Russia and China. The US Terminal's THAAD (High Altitude Air Defense) system requires rare earth elements, as does the Russian S-400 and S-500 missile defense systems.
Nothing appears to be able to release the exploitation of North Korea's underground minerals for external purposes except through possible international agreements, sanctions lifting, or, in extreme cases, military intervention. These elements offer new insights into the geopolitical situation in North Korea.
While China is distancing itself from its former ally and drastically reducing coal imports from North Korea due to "incompatibility with new pollution control standards", Russia is increasingly paying attention to the country's rare earth resources. South Korean companies could also consider new economic agreements to use these resources.
In the 1990s and 2000s, North Korea's immense energy potential prompted several South Korean conglomerates, including KORES, to invest in northern mining projects and to consider developing infrastructure to facilitate rare earth exploitation. The Kim regime has neither the financial means nor the technological know-how to use these mines itself. KORES has analyzed that Pyongyang has already signed a total of forty investment agreements with foreign companies - 90 percent with China, despite ongoing sanctions.
Several South Korean officials were alerted to Beijing's interest. South Korean MP Park Young-sun said: “The government must act quickly because China has already secured many natural resources in North Korea. If South Korea can import natural resources from North Korea, it could use them stably for several decades. “With South Korean President Moon Jae-in and North Korean leader Kim Jong-un resuming talks, the South Korean authorities are talking openly about further expanding the north-south rail infrastructure project. The DPRK could be about to be integrated into a huge supply chain infrastructure via a metal silk road - a strategic partnership between Russia and China, which simultaneously invests in railways, pipelines and ports parallel to Chinese special economic zones such as North Korea (SEZ), a geographically defined one Area that is subject to the unique regulations and administration of the host country in which it resides to attract foreign direct investment that could not otherwise be achieved. Four specific regions in North Korea could be considered national priorities - Rason, Unjong, Wonsan and Sinuiju. These zones, with a multitude of intended functions and supposedly foreign-friendly regulations, signal the willingness of the Kim regime to examine economic policy options. Although the Kim regime may promote special economic zones as a key element of its economic development strategy, there is still a long way to go to make these zones successful.
The first UN sanctions against North Korea date back to 1993 and were counterproductive as they continued to put Pyongyang under pressure to blackmail the world with their nuclear weapons and missile tests. North Korea opted for a predictable deterrent strategy today, namely to increase its missile tests to demonstrate its determination, but also its defense capabilities in an international environment that they consider hostile.
A way out of this crisis could be a possible de facto recognition of North Korea's nuclear power status, similar to India, Pakistan or Israel, which received nuclear weapons without international approval. This option would be an admission of the failure of the non-proliferation policy, but it could break the stalemate that is pushing Pyongyang to further advance its nuclear program and missile threats. A 1994 agreement had already raised many expectations and hopes for a way out of the crisis: North Korea had to give up its nuclear program in exchange for energy aid from South Korea, Japan, Russia and the United States, which had committed to build two light water nuclear power plants in North Korea. This agreement failed because the various stakeholders had made no commitments.
It is no exaggeration to consider that the “art of negotiation” also applies to rare earth elements. If Washington does not take North Korea's rare earth resources seriously, the winner could again be Beijing. Moscow could also benefit from Washington's loss as China continues to need access to energy resources in Russia and Central Asia, as well as Russia's advanced military technologies. China's attempts to generate energy pose a significant challenge for American politics. The riddle can therefore be about who offers the best return on capital, not only for real estate but also for rare metals, with Kim Jong-un possibly accumulating a huge fortune . Is China able to reach a possible US agreement? Would another summit open up a second chance?
Patricia Schouker is an energy and security analyst based in Washington, DC. She is a non-resident fellow at the Colorado School of Mines at the Payne Institute and an associate member of the New College at Oxford University. Twitter: @Patricia_Energy. This article was first published last year.
Click here to read the full article.
You should check here to buy the best price guaranteed products.
What Ben Affleck's Luxury Gift to Jennifer Lopez Symbolizes
Unemployment claims may never go back to 'normal.' Here's why that's a good thing.
Davion Mitchell with a deep 3 vs the Golden State Warriors
Tokyo Olympics: Taiwan stars trolled by Chinese nationalists
CNN’s Chris Cuomo Ignores Developments In Brother’s Scandal During Tuesday Night Broadcast
What it takes to be the largest condom brand in sex-shy India