China Eyes N. Korea's Mineral Wealth

China Eyes N. Korea's Mineral Wealth

Wen Jiabao, China’s premier, can hail his visit to North Korea as a bit of a diplomatic coup. Now the question is whether there is an economic dividend too.

After bear hugs with Kim Jong-il and co-operation deals, Mr Wen engin­eered the geopolitical compromise he wanted, with the North Korean leader on Tuesday announcing he might re­turn to inter­national talks on dismantling his nuclear weapons programme if he gets the kudos of direct talks with the US first.

Mr Kim’s announcement did not guarantee fresh six-party talks between Beijing, Seoul, Moscow, Tokyo, Pyongyang and Washington but restored political goodwill.

Yet if resource-hungry China hopes revived camaraderie will also grant it a large bite of North Korea’s massive untapped mineral wealth, analysts and diplomats warn, Beijing could be sorely disappointed.

North Korea’s mineral wealth is receiving close scrutiny, with South Kor­ea’s government this week valuing reserves at $6,000bn (€4,070bn, £3,670bn). Encouraged by data on metals, Goldman Sachs last month predicted the economy of a unified Korea could rival Japan’s by 2050.

Until the 1970s North Kor­ea was the wealthier half of the peninsula. Under communism it has supplied gold to the international bullion market. But poor technology and limited funds have in effect trapped most mineral re­serves, potential investors say.

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