While China’s dominance of the rare earth element (REE) market is nothing new, news that the mining giant and North Korea have signed a deal aimed at broadening the trade of both countries surprised investors.
The news, released last week, has sparked speculation that China is likely seeking possible investment opportunities aimed at the notoriously secretive state’s mining potential, specifically that of rare earths.
According to a statement released by Chinese Vice Commerce Minister Chen Jian, the government is willing to “support big Chinese companies who are willing to invest in North Korea to broaden the economic and trade cooperation with North Korea, to push the two sides to upgrade two-way trade and investment structures and study the feasibility of cooperation on big projects.”
The statement does not underline what the actual investment might be; however, speculators argue that it is likely to be aimed at North Korea’s mineral sector, which some estimate is worth more than $6 trillion — including a large number of rare earth metals. China does not currently adhere to the US and United Nations sanctions that restrict North Korea’s trade.
Source: Rare Earth Investing News
By Adam Currie