Reports: Musan mine to lay off 10,000 workers; coal exports halted

At the end of last year, the Daily NK reported that North Korea’s iron ore exports to China had stopped, but offered two different explanations for that — a price dispute with China, and a shortage of hydroelectric power caused by drought. One of the reports claimed that the power cuts halted the massive iron ore mine at Musan, which had caused “major disruptions” at the Kim Chaek and Songjin steel mills. All three facilities are propaganda showpieces of North Korean industry.

[The massive Musan mine. The yellow line on the left is the border with China]

In a follow-up report, the Daily NK now blames electricity shortages and a price dispute with China for plans by North Korea to lay off 10,000 of the 23,000 workers at Musan. The decision isn’t going over well with the workers:

For most, the focal concern is what happens next, as no jobs are guaranteed to those laid off. “Officials at the mine may say that they’re struggling with deciding on whose names to add to the list, and workers are irate, saying that ‘they can’t get away with this!’” the source said, noting that the surrounding village has been cast into a state of “unrest” because of the cutbacks. [Daily NK]

According to last year’s reports, however, labor shortages in the coal mines have caused North Korea to send inexperienced convicts to work there, causing a high rate of disabling and fatal accidents. One would think that the regime could find work for these men, even if that work is in Malaysia.

But now, Radio Free Asia reports that North Korea’s coal exports to China have also “dropped off dramatically,” and that the North has exported “little if any” coal to China this year. According to the report, North Korean coal has a high sulfur content and can’t pass China’s new air quality standards. RFA also links North Korea’s troubles to lack of hydroelectric power, indirectly. North Korea can’t export its coal, because it has to send it to thermal power plants, to keep the lights on in Pyongyang.

(Me: on top of all that, North Korea’s railroads and the locomotives that run on them are poorly maintained, and they’re mostly powered by electricity. Putting a lot of coal trains on the network will further strain the infrastructure.)

With mineral products accounting for more than 60% of North Korea’s exports to China, and with China being the destination for 90% of North Korea’s exports, one might expect to see these disruptions (if they’re sustained) reflected in Pyongyang’s luxury goods imports for 2015.