NK Largest Iron Ore Mine Grinds to a Halt

The devastating effects of chronic power
shortages in North Korea continue unchecked–most recently evidenced at the country’s largest producer of iron ore, Musan
Mine, where operations have ground to a halt.
 

“This year’s power output from hydroelectric plants stands
at less than half of last year’s,” a source based in North Hamkyung Province
told the Daily NK in a phone conversation on Monday. “In the midst of this,
they had kept Musan Mine partially running, but a few days ago it came to a
full stop.”

With this year’s low rainfall, major power plants have been
running intermittently, causing problems not only for residents but also in terms of major state industries.

“The little electricity that was being sent to the mine
had to be rerouted to threshing machines on collective farms [for harvest threshing], and
the result is that the production of iron ore at Musan stopped,” the source
explained. “Kim Chaek Steel Mill and Songjin Steelworks, which both use iron
ore, are facing major interruptions to iron and steel production.”

Musan Mine is North Korea’s largest iron ore producer. It sits on an estimated 3-billion tons, and churns out roughly 6.5
million tons or ore per year, part of which is supplied to Kim Chaek and
Songjin for the production of iron and steel.

With the expansion of trade with China in the early 2000s,
North Korea has also been sending thousands of tons of iron ore across the border to
China through Chilsong Customs in Musan. The source speculated that if iron ore production,
which accounts for a significant portion of trade between Pyongyang and
Beijing, comes to a stop, it could spark an economic crisis.

North Korea’s inability to quickly resolve its power crisis
has been compounded by China’s withdrawal from iron ore imports over price disputes; the source
asserts that against this backdrop, iron ore production will remain shut down
in the area for the foreseeable future.

He added that considering iron ore prices in the global
market have been on a downward trend since 2011, it will not be easy to open up
new export channels, making it difficult to predict when production will
restart. Research from a local office of South Korea’s central bank indicates
iron ore prices this year have been continually dropping, dipping as low as 82
USD per ton.

According to the source, the suspension at the mine has both state-run factory
workers and families concerned. “What if the rations that we were barely receiving
thanks to iron ore exports are cut off?” they’ve pointed out. “If the rations
are cut off, mechanics working at the mine will want to go sell things in the
market. In the case that the mine reopens [and they fail to return] it would
bring further losses to the mine.”

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