North Korea is actively exporting coal in defiance of a UN Security Council sanctions resolution, Daily NK has learned. While North Korean coal sold for less than half of international prices last year, its price has increased sharply in recent months amid a surge in Chinese demand for coal.
Speaking on condition of anonymity, a Chinese source with knowledge of North Korea told Daily NK on Monday that North Korea has recently been receiving USD 120 per ton of 5,000kcal/kg generator coal exported to China.
North Korea is reportedly paid USD 150 per ton of high-rank coal at 6,000kcal/kg and above. The North is said to export at least 5,000 tons of coal at one time; at full price, it would presumably earn USD 600,000 worth of foreign currency for that much generator coal at 5,000kcal/kg or below.
North Korean trade companies used to smuggle relatively small amounts of coal, around 3,000 tons, into China. Currently, government officials are getting involved in exports, enabling trade companies to handle more coal than before, the source explained.
Notably, coal prices in North Korea are currently more than twice their level at the end of 2022.
In 2019, prior to the COVID-19 pandemic, North Korean coal for heating at 5,000kcal/kg sold for USD 40-50 per ton.
However, energy prices spiked after Western countries placed an embargo on Russian raw materials following its invasion of Ukraine last February. The price of North Korean coal shot up as well, reaching USD 100 per ton last August.
Then in November 2022, the price plummeted once again to USD 50 per ton after North Korea sought to rapidly sell off coal to China. That was when North Korean trading companies reportedly sold coal cheaply to help them reach their foreign currency earnings quotas for the year shortly before reports went out in late December.
Increased Chinese demand for coal leads to rise in N. Korean coal prices
The price of North Korean coal has gone up considerably as of late and is now much the same as international coal prices.
According to Bloomberg, 6,000kcal/kg high-rank coal from Newcastle, Australia, cost USD 144.80 while 5,500kcal/kg coal from Qingdao, China, cost USD 115 as of July 5.
While international energy prices soared after Russia’s invasion of Ukraine last year, demand has been decreasing and supply stabilizing, bringing prices back down to prewar levels. Furthermore, increasing demand for coal inside China has caused the price of North Korean coal to rise as well, becoming comparable to international prices.
Despite international sanctions and surveillance, the North Korean authorities have been brashly carrying out ship-to-ship coal sales in the middle of the day.
“When only a small amount of coal was being exported, ships would generally maneuver at night to avoid surveillance. But nowadays, large tankers are entering China’s Shandong Province from Nampo. Most of those tankers are carrying coal or mineral ores containing zinc or iron,” the source said.
The UN Security Council completely banned North Korea from exporting coal or iron ore through Resolution No. 2371, which was adopted in August 2017.
Translated by David Carruth. Edited by Robert Lauler.
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