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Dagyum Ji is a senior NK News correspondent based in Seoul. She previously worked for Reuters TV.
The South Korean government is preparing plans for an inter-Korean project involving the refurbishment of North Korea’s infrastructure and improving its mining sector, Seoul’s Ministry of Land, Infrastructure and Transport (MOLIT) announced on May 2, in a move which had remained largely unpublicized until Monday.
The South’s MOLIT gave the public “emergency notice” of a bid for a research project entitled “Study on the Development Strategy for the Inter-Korean Cooperation Project on Infrastructure and Resources” a week ahead of the country’s presidential election on Tuesday.
MOLIT argued that the economic development of North Korea needs to be initiated as soon as possible, “to reduce the enormous cost” of a future unification, referring in particular to the “huge financial burden caused by underdeveloped infrastructure”.
98 percent of railroad lines in North Korea are on a single track railroad and train operating speed is, on average, around 30–50 km/h due to obsolete railway facilities, according to MOLIT, adding that the capacity for cargo in ports has remained stagnant at around 37 million tons for two decades.
Major power generation facilities are running at 30% capacity due to aging, the report added, and annual power production is 19 billion kWh: 3.5% of what South Korea produces.
MOLIT’s proposal argues that the exploitation of North Korea’s underground natural resources could “cover the expense of repairing the North’s poor infrastructure.”
“[Seoul] will develop… mines and establish power generation facilities and transportation infrastructure around mines,” MOLIT said in the proposal. “Profitability will be secured by owning the development rights of resources or exploiting mineral resources.”
The North has “a number of minerals” including magnesite, zinc, iron, coal, copper, and gold, the report argues: commodities that South Korea normally has to import.
The potential value of North Korea’s mining sector is estimated at around USD$6 trillion, according to data released by Seoul-based North Korea Resource Institute (NKRI) in 2014.
The project could “bring economic benefit to both South and North Korea,” MOLIT said.
Despite the project being only at the preliminary research stage, the ministry said the purpose of the project was to find “feasible ways” it could be initiated. Investment costs are still to be estimated and profitability will be evaluated to “commercialize” the project, according to MOLIT.
MOLIT suggested four different regions in the North for development: Tanchon port city in South Hamgyong province, Hyesan city in Ryanggang Province, Musan County North Hamgyong Province, and South Pyongan Province. Hyesan city and Musan county are located on the China – North Korea border.
MOLIT will review the business competitiveness and feasibility of the four candidate regions, all of which are believed to be rich in mineral resources.
The appropriate production scale for each mine and the infrastructure needed for development of the mines also needs to be assessed, as does the scope of infrastructure refurbishment necessary.
The ministry suggested the project could work as a private-public partnership, and said private capital would be welcomed. A detailed assessment of costs and feasibility is predicted to cost 40 million KRW (USD$35,354) and is estimated to take seven months.
Edited by Oliver Hotham
The South Korean government is preparing plans for an inter-Korean project involving the refurbishment of North Korea's infrastructure and improving its mining sector, Seoul’s Ministry of Land, Infrastructure and Transport (MOLIT) announced on May 2, in a move which had remained largely unpublicized until Monday.
The South’s MOLIT gave the public “emergency notice” of a bid for a research project entitled “Study on the Development Strategy for the Inter-Korean Cooperation Project on Infrastructure and Resources” a week ahead of the country's presidential election on Tuesday.