China has found a new source for rare earths, its own exports of which are snarled up in controversial international trade disputes. According to a report in the South Korean paper, JoongAng Ilbo, Beijing struck an agreement with North Korean leader, Kim Jong-il, when he visited China in May, to exchange free fertilizer and heavily discounted grain for access to North Korea’s newly discovered but abundant reserves of rare earths—17 elements critical to high-tech manufacturing of everything from consumer electronics to missiles.
The agreement reportedly covers 200,000 tons of fertilizer and 500,000 tons of corn; the former free and the latter at 50% of world prices. First shipments have already taken place, according to the report, which is based on sources in Beijing. The rare earths will come from Musan in North Korea’s Hamgyong Province. China will have to supply mining equipment and build roads to the mine, but will get have the extracted rare earths for free and pay world prices for the other half.
North Korea is thought to have some 20 million tonnes of rare earths, perhaps more as the extent of the exploration that has been done is unknown. That would be about the same reserves as Russia has and 40% more than the U.S. China, which produces more than 95% of the world’s rare earths, has reserves estimated at 90 million tonnes.