North korea: the coal is in the harbour but the Russian business is booming

A mountain of coal to north Korean port of Rajin, in the special economic zone of Rason, on November 21, 2017 in North Korea (Photo Ed JONES. AFP)

The north-eastern tip of North Korea, a metal barrier three metres tall, bristling with barbed wire is in the first line of the UN’s efforts to prevent Pyongyang from exporting its coal.

Because of the sanctions, a mountain of coal in north korea, which would have formerly been aimed at China, is piling up behind this barrier in the port of Rajin, near the chinese border, and Russian.

But two million tons of coal Russian have passed this year on the nearby wharf, arriving by train and leaving by boat in China, with the largest port operator in the Russian RasonConTrans.

Its activities are specifically excluded from the scope of UN sanctions that target the nuclear and missile programs in north korea.

This does not preclude that some are trying to use it for the work around, explained to the AFP, the deputy director of RasonConTrans, Novel Minkevitch.

“They ask us, but we said no, we don’t do that”. He wants to show the coal stuck on the dock next to it.

“There is coal in north korea, he was struck down sanctions now, then it is always there,” he says.

He refuses to specify which application to his company to cheat. “People,” he says. “Different people”.

The panel of experts of the united nations for North Korea had explained in its interim report that Pyongyang had “deliberately used channel indirect export of prohibited goods”.

– Attracting foreign companies –

For years, coal has been going strong in Pyongyang. China, the main ally of the North, has imported 22 million tonnes in 2016 to nearly $ 1.2 billion.

Beijing is said to have stopped today. On the other hand, the business of RasonConTrans are flourishing.

Since it began its operations in 2015, its volumes have doubled each year. The company is targeting the three million tonnes in 2018, and beyond five million tonnes.

This represents between three and six ship movements per month. The quay can accommodate vessels to 180 meters long, with a capacity of 50,000 tons of coal each, and most of them have to destination Shanghai.

On the hill behind the city of Rajin, runs an oil refinery is closed down, initially built to process the crude soviet, at the time where the big brother communist supplied to Pyongyang of the raw materials are cheap or even free.

The inhabitants attributed the closure to the sanctions, but the refinery is shut down for years, the idleness of their chimneys, showing a dream of economic progress.

Two large bronze statues of the founder of North Korea Kim Il-Sung and his son and successor, Kim Jong-Il, shall, on Rajin.

Rajin is the port of the special economic Zone (SEZ) of Rason, which was opened by Pyongyang to attract foreign companies where the isolated country made common border with the giant Russian and chinese.

– Fraternal Relations –

Despite the economic rules more flexible in that area, the locality is filled with propaganda posters that we see everywhere else in North Korea.

Has Rajin, the cost of the port handling is less than 30 to 40% of Russian ports. The North Korean are grutières especially good, probably because of the care they are to carry out repetitive tasks, ” notes Mr. Minkevitch.

Competitors of RasonConTrans on the Pacific coast of the Russian are approaching their maximum capacity. China and economies, power-hungry but resource-poor Japan, South Korea, and Taiwan never have too much of the coal from the extensive mines russians, ” says Minkevitch.

Moscow and Pyongyang have long enjoyed fraternal relations. The photo of a meeting between Kim Kong-Il and Vladimir Putin in Moscow in 2001 throne in the office of RasonConTrans.

The company, a subsidiary of Russian Railways, is owned 30% by the port of Rajin.

Third taxpayer of the SEZ, the company employs approximately 300 North Koreans and 110 Russian. It imports directly from Russia most of its needs, such as diesel for its generators.

It is almost completely independent of the unreliable electricity supply in north korea. According to Mr. Minkevitch, the SEZ is in the dark about 30% of the time.

If some aspects of the North Korea reminds him of the former soviet Union, ” he says, working in a country subject to such sanctions remain a “unique experience”.

It is difficult to import spare parts and equipment construction and “there’s more red tape”. “It’s interesting, but it is hard”.

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