Chinese authorities began prohibiting

mineral exports from North Korea on March 1st in a move not strictly related to

the passing of UN Security Council Resolution 2270, which outlines sanctions

against North Korea. North Korean authorities and foreign-earning currency enterprises tied to the military did not see this move coming

and expressed embarrassment and shock.

In a telephone conversation with the Daily

NK on March 4, a source from North Pyongan Province said, “Beginning on March

1, mineral exports such as coal and ore have not been allowed to pass through

Chinese customs into China. Trucks loaded with mineral deposits have been idly

waiting in front of Chinese customs near Dandong. The foreign trading companies

are simply waiting for instructions from the higher authorities.”

Two separate sources, also based in North

Pyongan Province, verified these claims.

“Foreign-currency

earning companies began hearing rumors that mineral exports would be blocked

from entering China back in February, but they simply didn’t believe it. The

authorities did not make an official announcement or put forward a policy.

Instead, senior officials have simply remarked that it will be necessary to

stop exports of minerals for the time being,” the source continued.

“Some crafty business cadres raised the

possibility of using sea-routes to smuggle the product in with Chinese foreign

traders, but their Chinese counterparts rejected such proposals. Some North

Korean merchants have posited, “Maybe they’re playing hardball to get us to

lower prices to rock bottom?”

China participated

in United Nations sanctions after North Korea’s first, second, and third

nuclear tests, she explained, but there was no special impact on trade. North Korean cadres

expected that this time around would be no different and that the efficacy of

the sanctions would eventually fizzle and fade to nothing.

North Korean traders therefore expected no

significant difference as they sent mineral exports through the North Korean

border town of Sinuiju into the Chinese city of Dandong. They were in for a

surprise when the door was slammed shut. The regime has yet to come up with an

effective countermeasure or policy response, which cadres take as a sign that

the road will open up again in the near future, according to the source.

Across the board, there are expectations of “short-term export restrictions,” but some have voiced concerns that the

restrictions might become long term. If developments continue down this road,

the military foreign-currency earning enterprises and North Korean authorities

who have been making a handsome profit on mineral exports are going to be given

a significant blow.

“Coal and mineral exports have been an

important source of funding for the Korean Workers’ Party. Kim Jong Un needs

foreign currency to prepare for the upcoming 7th Party Congress and companies

need foreign currency in order to issue the bribes that guarantee their

survival. This turn of events comes as bad news to all of them. This might

force authorities to turn to other sources of funding in order to ready for the

7th Party Congress, including perhaps illicit methods such as the smuggling and

selling of illegal drugs,” she said.

“If the long-term export restrictions

bankrupt the mineral companies, many innocent workers will lose a source of

income. Merchants and residents connected to the export companies in various

ways will struggle to find new jobs. Kim Jong Un cannot discount the resentment

that this will cause.”

On March 2, the United Nations Security

Council unanimously adopted a resolution which enacts strong sanctions

requiring that all cargo exported from and imported to North Korea be

inspected. The resolution also bans the export of jet fuel, blocks the trade of

minerals, freezes financial assets, and restricts the trade of luxury items,

etc.