EDITOR: | December 15th, 2013 | 6 Comments

Did Rare Earths Kill Jang Sung-Taek?

| December 15, 2013 | 6 Comments
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nkdmDid Rare Earths kill North Korean General (also Kim Jung-Un’s uncle) Jang Sung-Taek?

Hold that question, as the “cause of death” for any execution in North Korea is far more complex than what appears.

The official bill of indictment was rather lengthy – 2,700 words as published in the DPRK press, supplemented by some culinary suggestions sure to resonate with malnourished North Koreans, such as: “I want to grab Jang by the neck and shove him down a boiling pot.”

According to the charges, Jang was guilty of debauchery in many forms, starting with the world-historical bad taste to be a capitalist-roader in a socialist paradise:

“He let the decadent capitalist lifestyle find its way to our society by distributing all sorts of pornographic pictures among his confidants since 2009. He led a dissolute, depraved life, squandering money wherever he went.”

That passes for a bit of gallows humor in the DPRK, especially when Kim Jung-Un’s papa was legendary for jetting his personal chef to Tokyo for sashimi, Iran for caviar, Paris for Hennessy Paradis at $900 a bottle — to wash down pizza, ordered up from the Pizza Institute of Northern Italy (seriously), and to Havana for, well, Havanas… which he doubtless lit with burning hundred dollar U.S. notes, bogus of course, as counterfeit Ben Franklins are one of North Korea’s most prized exports.

Now, young Kim could be an ascetic – only Dennis Rodman knows for sure – but if Uncle Jang out-debauched the North Korean inner-circle, he would have needed a decent-sized nation’s GDP to get it done.

As AP summarized: “Pyongyang’s statement called him a “traitor to the nation for all ages,” ‘worse than a dog” and “despicable human scum” — rhetoric often reserved in state propaganda for South Korean leaders.”

Ouch!

Jang was also charged with serious architectural crimes: He “ordered that a granite sculpture featuring [Kim Jung-Un’s] signature be put in the shade, not in a central spot,” and for “half-hearted clapping” during a ceremony lauding Chairman/Supreme Commander/First Secretary/Marshal Kim. That last is truly inspired, recalling the dangers in Soviet days of being the first to stop clapping for Comrade Stalin – earning a one-way ticket to the Gulag — the result of which was often epic-length bouts of what Soviet media described in reports of Stalin’s speeches as “prolonged, sustained applause.”

Finally, The Economist chimes in: Jang “squandered foreign currency at casinos,” and sold off “precious resources of the country at cheap prices.”

Now we’re getting somewhere.

That single line sent me back to news stories in July 2012, reporting for the first time that North Korea had, in the last days of Kim Jong-Il’s life, received a delegation from South Korea in the industrial region of Kaesong – and provided the South a sampling of North Korean rare earths to take home for testing.

The go-between for that meeting? None other than Jang Sung-Taek.

Not long after, in Aug 2012, Jang visited China with all the pomp accorded a head of state. REEs were rumored to be on the agenda. After all, during Kim Jong-Il’s final months, North Korea trumpeted a grand bargain with China: The PRC would be given access to North Korea’s rare earths deposits, in exchange for the immediate delivery of fertilizer and corn.

Dangling access to the elements in front of REE-hungry South Korea; journeying to China where discussions must have involved whether young Kim would honor his father’s REE-for-food swap: Rare Earths were shaping up as a useful commodity – almost as good as nuclear weapons, which North Korea had learned to trade, retract and trade again, for all manner of goodies from the West.

And each time, the point man was Uncle Jang.

So now, rewind to December 5, when out of nowhere – it’s not as if journalists are traipsing around Pyongyang — came a story headlined “Largest Known Rare Earth Deposit Discovered in North Korea.” The report contained details on a new venture to exploit North Korea’s REE riches not with China or South Korea – but with an Australian company, privately-held SRE.

Five days later, Jang was on trial, a day later he was convicted, sentenced and executed. Total elapsed time: one week from the North Korean-Australia REE announcement.

Of course, as so many news reports are tut-tutting, the execution of Jang Sung-Taek may be marked down to the madness of young Jung-Un. Or there may be a method in it – a grand, gansta-style re-trading of a deal his uncle made which met with Jung-Un’s disfavor. If the latter is true, this week’s window into North Korea’s brutality may be paired with an outreach to the West.

If so, it’s a page right out of Kim Jong-Il’s playbook. Papa would be proud.

For now, however, North Korea’s vaunted REE riches remain in the ground, joined there by Uncle Jang. As for the Australians preparing to develop North Korean rare earths, one hopes the terms of the deal are rich indeed – as it appears they’re taking the concept of “political risk” to a whole new level. Just ask Jang Sung-Taek.


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Comments

  • vacuum

    fascinating and insightful article, and clever awareness to put it together. Well done.

    In our ever and anon consideration of world supply factors, and in light of a possible deluge of North Korean minerals:

    Perhaps we should go back to the time before the Berlin Wall fell and review what then were the economic impact concerns about East Germany if liberated. One of them was a sudden increase of the German labor pool. Another might have been too much beer and sausages–viz., something one step up from mere commodity. Yet perhaps there was some basic commodity in play also. … Despite all this, Germany marched forward and now has the strongest economy in the EU.

    Taking the Soviet Bloc, all the REEs there. Despite Iron Curtain falling, it’s been over twenty years and Stans is still not providing Japan and Europe with HREEs.

    So, if the DPK did begin exportable production of REEs, it is probably not an easy thing to say it would depress prices and/or increase supply. After all, there are a lot of hands to grease along the way.

    December 15, 2013 - 5:26 PM

    • Tim Ainsworth

      Perhaps the path to market for Nth Korea’s large flake graphite is instructional.

      December 16, 2013 - 6:52 AM

      • vacuum

        source: Graphite: Supply and Demand, Feb 14, 2012 | Posted by: Rick Mills, miningfeeds.com

        China, India and Canada are responsible for most graphite mining and processing with China producing the lion’s share at 70–80%. China’s production is 70% amorphous and lower value small flake graphite.

        Currently China imports a significant amount of North Korea’s large flake graphite production raising considerable doubts in regards to China’s abilities to ramp up its graphite supply. Indeed China has already taken steps to retain its graphite resources by restricting its export quota – China imposed a 20% export duty, a 17% VAT and also closed state owned enterprises.

        “The days of cheap, abundant graphite from China are over.” Industrial Minerals Magazine May, 2011.

        It’s thought that the increased use of lithium-ion batteries could gobble up well over 1.6 Mt of flake graphite per year by 2020 – only flake, upgraded to 99.9% purity and synthetic graphite (made from petroleum coke, a very expensive process) can be used in lithium-ion batteries.

        “Annual flake graphite production will have to increase by a factor of six by 2020 to meet incremental lithium carbonate requirements for batteries.” Canaccord research report.

        December 16, 2013 - 7:01 AM

        • GoBucks

          Whoa, that’s interesting!!!

          I had no idea how important graphite is to lithium ion batteries.

          Thanks and a Merry Christmas!!

          December 16, 2013 - 2:28 PM

  • Frank Donovan

    North Korea has chosen to remain in the Dark Ages they don’t deserve to do business with the rest of the world and should be ignored.

    December 16, 2013 - 1:37 PM

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