By Jerry Guo
North Korea is a regime battling two major deficits: a near-total lack of economic competence and of natural resources. Or so the half-true story goes. Turns out North Korea is not as resource-starved as we thought. A recent Goldman Sachs report found that Pyongyang sits on mineral deposits worth some $3.7 trillion; South Korea puts the figure higher, at $6 trillion or more. The North's economy, dominated by heavy industry, has traditionally been powered by a plentiful supply of coal (the report estimates its reserves at about $505 billion). But the country's deposits of magnesite, limestone, and uranium ore in fact outrank coal as potential earners, and billions of dollars of gold, zinc, manganese, iron, and copper are also waiting to be tapped. Marcus Noland, deputy director of the Peterson Institute for International Economics, says that mining experts outside North Korea have indicated that "many of [their] mines are flooded or otherwise in disrepair, but could be rehabilitated."
Yet North Korea's crumbling infrastructure has crippled its ability to bring its treasures to market. A 2008 study by Noland found that a mere 10 percent of North Korea's exports in 2005 (the most recent year available) were minerals or ores. Still, this hasn't stopped several Western companies--including London-based Koryo Asia and the Swiss mining firm Quintermina--from knocking on Pyongyang's door in search of a competent business partner. Koryo Asia's chairman, Colin McAskill, said he just signed a letter of intent with the sealed-off government for a joint venture to mine "strategic metals." "North Koreans have and can conduct legitimate business," he said. Tell that to the U.N. Security Council.