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By John-Patrick Gerard Thackeray
With natural resources drying up around the world, an unlikely find in North Korea could redefine the country's long-term geopolitics in the region.
The recent discovery of rare-earth mineral reserves has created excitement for potential mining rights and increased income to upgrade the communist country's collapsing infrastructure.
SRE Minerals, a British private equity firm, estimates that the North could be sitting on a whopping 216 million tons of rare-earth minerals, which are vital for many high-tech applications, including clean energy, defense systems and consumer electronics.
China controls about 90 percent of the rare-earths market. It has large stockpiles after the central government relaxed environmental regulations, making mining highly economical.
North Korea does not have the ability to mine the minerals itself, so the Korean Natural Resource Trading Corporation (KNRTC) has signed a 25-year joint-venture agreement with SRE for the rights to develop all rare-earth deposits in JongJu.
The discovery has promoted China and Russia to increase their mining investment in North Korea.
Russia recently agreed to invest $25 million towards upgrading the North's railway system, in exchange for mineral reserves. And while China has denied North Korea's entry into the new Asian Infrastructure Bank, it has allowed Chinese companies to move into the region to work on transport and power projects.
North Korea can only benefit from this game-changing rare-earths find. By making sure it can communicate with countries and private companies, North Korea can capitalize through increased investment and infrastructure upgrades. These will not only benefit North Korean people, but allow North Korea to show that it is open for business in trade and tourism, allowing the country to be taken more seriously by governments in the region.
