Gold mines sustain Nork nuts
North Korean leader Kim Jong-il is positioned to escape the effects of international sanctions imposed on his regime by legally mining and selling gold on world markets, said investors and others dealing with his government.Dual use chemicals will continue to be restricted for the Norks until they give up their weapons programs. Like Iran, the North Koreans have trouble exploiting their natural resources because of their governments hostility toward the US. North Korea's situation is entirely caused by the paranoia of its leadership. With non paranoid leaders, it is a country that the US would be happy to ignore.
About 1.3 tons of gold bullion, valued at $28 million, were sold to Thai interests in two shipments delivered in April and May, Reuters news agency reported yesterday, quoting Thai customs officials.
The United Nations imposed sanctions in response to North Korea Oct. 9 nuclear test. Although the sales of gold bullion were concluded months earlier, they would not have been covered under the sanctions in any case, analysts said.
Macau-based Banco Delta Asia, or BDA, said this month that it had been selling North Korean gold for three years before the U.S. Treasury Department named the bank "a primary money laundering concern" in September 2005.
Gold exports from North Korea are nothing new: From 1983 to 1994, the communist nation exported a ton of gold a month via London markets.
Although production fell off in the 1990s, rich seams wait to be mined. King Kojong, Korea's last independent king, sold concessions for gold mining at Unsan, in the nation's far north, to U.S. interests in the late 1880s.
Japanese colonial businesses took over the mines in the 1930s. After the country's division, the North Korean seams were operated with Russian and German technological assistance.
"It is widely known that they have very substantial reserves," said Colin McAskill, a British national who was involved in North Korea's bullion business in the 1980s and 1990s. "The problem is that most mines are inoperative due to lack of capital and flood damage in the early 1990s. They must be producing again, to a limited extent."
Small-scale foreign investment has begun in North Korea's gold mines.
U.S. efforts to halt North Korean gold exports may predate the BDA controversy. A shipment of sodium cyanide was halted in Thailand en route to Pyongyang in 2004, reportedly under pressure from the United States, which suspected the material could be used for chemical weapons manufacturing.
However, Mr. Barrett insisted that the chemicals, common used in gold production, were destined for the North's mining industry.