(Source: www.forbes.com)

It was revealed recently that North Korea is sitting on approximately $6 trillion worth of natural resources, which the country lacks the technology or expertise to extract. The impoverished nation is quite literally sitting on a goldmine, a significant portion of which is made up of rare earth metals.  

Rare earth metals are not – as you would expect – exceptionally rare, but are generally found in small trace quantities underground. What is rare is to find them in high concentrations, which is exactly what experts believe is present beneath the soil of North Korea.

Not only are these resources difficult to obtain, they’re also crucial to many of our most advanced technologies. “The magnetic and conductive properties of these elements allow our modern technologies to be lighter, faster, and stronger, making them more efficient,” says Dr. Julie Michelle Klinger, an assistant professor of international relations at Boston University’s Frederick S. Pardee School of Global Studies. Among other things, they’re used in MRI scanners, cancer treatment drugs, nuclear reactor shielding, aircraft engines and smartphones.

“Without rare earths and the miniaturization capabilities they provide, computers would be the size of classrooms instead of the size of smartphones,” says Dr. Klinger. She points out that although the likelihood of rare earth elements beneath North Korea is high, they are obtainable elsewhere in the world. The concern, therefore, is not over where these elements can be found, but rather with where they are already being mined.

Today, around 90% of the world’s rare earth elements come from China (mostly in Inner Mongolia). Between January and September 2016, China exported 35,200 tons of rare-earth materials, a 50% increase (PDF) compared to the same period in 2015, according to the USGS. Other nations such as the U.S. have been attempting to build out their own refinery systems, so as not to be so dependent on China’s supply, but progress has been slow. The one refinery that the U.S. has established was shut down last year, and was sold last month to a Chinese consortium.

According to the U.S. Geological Survey, last year the U.S. imported $120 million worth of rare earth compounds, the vast majority from China, and that figure doesn’t account for the billions of dollars worth of consumer products containing rare earth metals that are imported into the U.S. each year.

Although other nations are attempting to catch up, for now China has a virtual monopoly on the global supply, largely due to the fact that it is willing to build and operate refineries with little environmental oversight. That is likely to remain the case even if North Korea manages to start extracting its own supplies of these elements.

“Because of the intense environmental and public health hazards created by rare earth mining, China’s strategy has been to become a net importer of rare earth elements to produce value-added technologies rather than a net exporter of rare earth oxides–which are the raw materials,” says Dr. Klinger. “They have been pursuing this strategy by developing and purchasing rare earth mines overseas: in Central Asia, Brazil, and elsewhere. Given this strategy, it is conceivable that Chinese interests may develop rare earth mining in North Korea, but a lot of other pieces would have to fall into place first.”

With China in a position to buy up the North Korean supplies of rare earth (perhaps the largest deposits in the world) and North Korea in need of capital, rare earth trade links could open up, which could further increase Chinese control over these important elements. Unnervingly, China has already demonstrated its willingness to strongarm other nations using its monopoly – in a dispute between Japan and China in September 2010, Japan detained the captain of a Chinese fishing trawler. China swiftly responded that it would halt all shipments of rare earth elements to Japan, and the Chinese captain was released almost immediately, a humiliating retreat for the Japanese and a wake-up call to the rest of the world.

As China continues to dominate the industry, tech manufacturers have little choice as to where they purchase their rare earth elements from. Apple has notably said that it will attempt to use only recycled rare earth elements in its products in future due to concerns over environmental impact and human rights, but it isn’t sure how to achieve that yet. 

If North Korea can work out a way to mine its rare earth elements in the near future it may indeed prove to be a boon for tech companies, but at what cost?

More Info: www.forbes.com