UN sanctions keep coal prices in North Korea stable ahead of winter

Korea in winter (Korean Culture and Information Service/WikiCommons)
October 12, 2019


Coal prices in North Korea are expected to remain stable at a time of year when sharp price increases are usually the norm because people scramble to stockpile the country’s most accessible heating source ahead of the winter, local residents say.

Sources say that residents have an unlikely reason to thank for the price relief — U.N. sanctions. A ban on exports of the commodity serves to to deprive Pyongyang of foreign cash that could be funneled into its nuclear and missile programs, but it also means there is an excess supply of coal in the domestic market.

“These days, a ton of good quality anthracite can be bought for only 100 Chinese yuan (about $14),” a resident of Sinuiju, North Pyongan province told RFA’s Korean Service on Monday.

“That’s not much different from the price in the summer,” the source said.

While prices are down across the whole country, the source said that people certain areas can expect to pay more.

“Sinuiju is in the area where coal prices are higher than in other areas because there are no nearby coal mines. Prices are probably much lower in places near the mines,” the source said.

“The price of coal usually goes up steeply in October because it is the time when people prepare for the winter, but people aren’t rushing out to buy coal. They expect that prices will not rise much this year, just like last year,” the source added.

The source explained that prices are not expected to rise significantly because of the sanctions on export.

“[In the past] we used to export as much coal as possible to China and other countries, but now that the export route is blocked, residents can buy it at a stable price,” explained the source.

The source said that the North Korean regime is crediting certain political purges as the reason for the price stability.

“Authorities say that the reason why coal prices are stable is because the government purged Jang Song-thaek and other officials who were selling all our coal to China [at our expense],” said the source.

Jang was the uncle of North Korean leader Kim Jong Un, and a leading figure in the North Korean regime until he was executed in December 2013 on Kim’s orders. He had close personal and business ties to China.

While the authorities claim the purge of Jang is what is keeping coal prices down, the people generally dismiss that idea, according to the source.

“[They] snort at the propaganda. People feel sorry for lecturers [who toe the party line] at lecture sessions. They say that the lecturers are forced to tell lies because their superiors are ordering them to,” the source said.

Another source, a resident of Pyongyang of Han Chinese descent who was visiting China, said that Pyongyang always gets special treatment in the wintertime.

“Pyongyang is one of the cities with the highest coal consumption during the winter. Even though there are no coal mines around Pyongyang, the price of coal is always cheaper than in other cities,” the second source said.

The second source also credited sanctions on North Korea for the low price of coal.

“In years past, when there were no international sanctions, the price of a ton of coal at this time of year was 200 yuan (about $28) and 300 yuan (about $42) in winter,” said the second source.

“Unless the U.N. sanctions are lifted and the coal export routes are reopened, there will be no significant change in domestic coal prices.”