coal mine
The Kumya Youth Coal Mine. (Yonhap News)

North Korea’s provincial trading companies are looking for ways to expand coal exports, Daily NK has learned.

Speaking on condition of anonymity, a Daily NK source in China said last Wednesday that Chinese traders who do business with North Korean trading companies have recently received many requests to “find Chinese companies that want to buy North Korean coal.”

North Korean coal exports are completely banned under U.N. Security Council Resolution 2371, which imposed sanctions on North Korea. However, North Korean authorities have earned foreign currency by secretly exporting coal, even when trade was suspended during Pyongyang’s closure of the country’s border during the COVID-19 pandemic.

Large trading companies led the coal smuggling during the COVID-19 pandemic, but since the recent implementation of the 20×10 regional development policy, provincial trading companies have begun smuggling coal on their own as regional trade expands.

However, as Chinese authorities have intensified their crackdown on smuggling North Korean goods, few Chinese traders are eager to import North Korean coal under the radar.

In fact, one Chinese trader, identified as A, who attempted to smuggle North Korean coal, was fined RMB 1.2 million (around USD 165,400) when the Chinese Coast Guard intercepted the shipment in transit.

“With the Chinese Coast Guard announcing rewards for tipsters to stop smuggling, North Koreans who know about coal smuggling sometimes drop a dime to the smugglers,” the source said. “If you get caught up in a crackdown in China, you’ll be investigated intensively until five or six accomplices are named.”

As Chinese authorities intensify their crackdown on smuggling, Chinese traders are demanding that North Korean trading companies safely transport the coal to the desired location.

In the past, North Korea often took payment in advance when exporting goods, but recently Chinese traders have been paying for exports after transactions are completed because they are taking on more risk, the source said.

“There’s a demand for North Korean coal in China because it burns relatively hotter and it’s cheap,” the source said. “If you buy a ton of coal for 400 to 450 RMB [around USD 55 – 62], you can make at least double that in profit. So there’s no reason for the Chinese side to say no, as long as they can get the coal safely from North Korea.”

Under these circumstances, North Korean trading companies are actively seeking ways to export coal through Chinese traders, saying they will do whatever it takes to send good coal to whoever wants it.

“To earn foreign exchange, North Korea ultimately needs to sell money-making minerals like coal, so it will continue to try things like this,” the source said.

Daily NK works with a network of sources living in North Korea, China, and elsewhere. Their identities remain anonymous for security reasons. For more information about Daily NK’s network of reporting partners and information-gathering activities, please visit our FAQ page here.

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