The price of North Korean coal is increasing amid skyrocketing international energy prices due to bans on imports of Russian raw materials. The increase of coal prices may lead to a rise in illegal exports of North Korean coal.
According to multiple Daily NK sources in North Korea on Wednesday, Chinese traders are paying an average of USD 70 per ton for smuggled North Korean coal.
That is not even one fourth of international price coals, including Australia’s benchmark Newcastle index, which have been climbing at a frightening rate due to the EU’s ban on Russian coal imports.
The price of smuggled North Korean coal is about half that of the local price in China, where there is a price cap. However, it is also more than double the price of exported North Korean coal prior to the COVID-19 pandemic.
Moreover, even compared to early October, when smuggled coal sold for about USD 50 a ton, the current price represents a more than 40% climb from six months earlier.
At the time, Chinese coal prices were skyrocketing due to local shortages following Beijing’s suspension of Australian coal imports due to trade disputes with Canberra.
In the end, the price of North Korean coal is essentially hitching on to continuously rising global coal prices.
Moreover, the sources said North Korea is selling high-quality coal of more than 7,000 calories to China. Accordingly, more Chinese traders are reportedly demanding North Korean coal.
They further said that while coal exports are not as brisk as they were prior to the pandemic, North Korea has been continuously exporting coal through the port of Nampo as of late.
According to a recently published report by the UN Security Council Sanctions Committee on North Korea’s Panel of Experts, North Korea exported 552,400 tons of coal to Chinese waters and ports through 64 ship-to-ship transfers between September 2020 and August 2021.
As the price of coal for smuggling out of the country increases, so too does the price of domestically consumed coal.
Local-use coal in North Korea has recently been trading at USD 30 to 35 a ton at the point of production. As recently as 2019, prior to North Korea’s closure of the border in the wake of COVID-19, the price of domestically consumed coal was USD 20 to 25 a ton at the point of production.
Meanwhile, North Korean authorities have been illegally exporting mineral resources other than coal, including iron ore and copper.
The sources told Daily NK that North Korea has been smuggling iron ore from Musan Mine, refined zinc and zinc ore from Tanchon, copper from Hyesan Youth Copper Mine and even rare earth elements. “Every mineral that comes from the ground in North Korea is being sold,” one of them added.
UN Security Council sanctions completely ban the export of North Korean minerals, including coal, copper, lead, and rare earth minerals.
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