A landmark discoveryThe deposit at Jongju more than doubles current global known reserves of rare earth oxides — they now stand at 110 million tonnes. The Jongju deposit is believed to be worth trillions of US dollars, and may be able to produce fluorite, apatite, zircon, nepheline, feldspar and ilmenite as by-products. Further exploration will proceed in March 2014 and will include core drilling. Results will be reported according to Australia's JORC Code, a standard for mineral disclosure that is used worldwide. REEs financing North Korean economic development REEs are improving North Korea's economic situation, according to the Asia Times. New construction and improved infrastructure are in evidence in many cities, and the magnitude of the country's REE reserves continues to attract foreign interest — and foreign investment. In fact, analysts believe REEs, which fetch high prices, may enable North Korea to improve its economic situation without any real reform or structural change. Such an increase in prosperity could improve conditions for the country's citizens, as well as international relations. That possibility becomes increasingly likely as China limits its REE output and exports, making room in the market for another supplier. China currently controls more than 95 percent of the world's REE production, as per the Asia Times, but it does not have the technology to exploit its reserves to the fullest. North Korea even exports REEs to China, and has done so for a number of years. Risks of doing business in North Korea Of course, foreign firms still face high barriers in doing business of any kind in or with North Korea. For example, the country has no formal relations with Japan and is still technically at war with South Korea. Both countries trade with North Korea on an extremely restricted basis because of its frequent provocations and stated intent to develop nuclear weapons, Voice of America states. Further, North Korea's infrastructure is still very poor — though, as mentioned, it is improving — and can increase costs for mining companies.
"The last company that really went in big in the North was of course South Koreans during the Sunshine Policy," Scott Bruce, an associate at the East-West Center in Hawaii, told Voice of America. "And you had KORES, the Korean resource group, that invested heavily in a few joint mineral projects in the north. And then, when the political relationship between North and South deteriorated, they lost any word of what was happening in those mines."Related reading: JV to Develop "World's Largest Known REE Deposit" in North Korea Could North Korea be the Next Rare Earth Powerhouse? Rare Earth Discovery Puts North Korea on the Map from Rare Earth Investing News