The news of a 216 million tons rare earths deposit discovered in North Korea over a year ago, grabbed headlines and made analysts speculate about the value of what is believed to be the world’s largest deposit of the coveted minerals, used in electronics such as smartphones and high definition televisions.
But after months of anticipation it seems that experts are not sold on the legitimacy of the reserve estimates, originally said to be more than double the global known sources and six times the reserves in China, the market leader.
Kim Jong-un’s administration has not stopped advertising the discovery. Just a few days ago, it posted an article about the “massive amounts of rare earth elements” the country holds on the foreign publicity website “Today Choson.”
“The numbers are not backed up with any solid data, it is nothing but a list of what they have under the ground. [The author of the study, Dr Louis Schurmann] has absolutely no credibility. Whatever he says, I take it as hoax,” Choi Kyung-soo, a senior researcher at the North Korea Resource Institute told NK News.
So far only one country — China — controls the rare earth market, holding somewhere between 80% and 95% of production. In the last decade Beijing tried imposing export quotas, but the World Trade Organization deemed them as illegal. It has since changed its approach and is trying to limit exports by taxing them heavily.
If not North Korea, then who?
The arrival of North Korea as a second top provider of rare earths, as well as other nations — including the U.S., Canada, Kazakhstan, Malaysia, Australia and Greenland — gave the industry hopes of market diversification.
However, a representative from North Korea’s Information Systems for Resource of told NK News he is not sure whether British Islands-based private equity firm SRE Minerals Limited, which made the touted discovery in Dec. 2013, will ever be able to back up its claim.
“[The 2013 study carried out by an Australian geologist Louis W. Schurmann] does not really give us the solid proof about amount of DPRK’s rare minerals nor how profitable it is,” he was quoted as saying.
Meanwhile Molycorp’s Mountain Pass mine in California — the biggest rare earth project outside of China — has not lived up to expectations. And other rare earth companies, mainly Canadian, have shed nearly all of their value in the last few years.