25/09/2012 03:05:00

Cash-Starved North Korea Secretly Sells Gold

SEOUL -- North Korea has been secretly selling gold to make up for shortages of hard currency after it spent millions of dollars celebrating the 100th birthday of its founder, a news report said Tuesday.

The Chosun Ilbo daily quoted sources in China as saying that the impoverished communist state had cashed more than two metric tons of gold worth $100 million in China over the past year.

"North Korea has been exporting not only gold ingots it had obtained from mines or stored in government agencies but gold trinkets it had collected from ordinary people," an ethnic Korean businessman told the daily.

"North Korean trading companies in China have been cashing the gold in secrecy," the source said. "For this purpose, North Koreans are compelled to sell gold trinkets to government authorities."

The movement reportedly began after Kim Jong Eun took the reins from his late father Kim Jong Il, who died of heart attack in December last year.

North Korea has been starved of hard currency after economic exchanges with South Korea came to a halt following its alleged torpedoing of a South Korean warship with the loss of 46 lives in March 2010, the report said.

It was estimated to have spent millions of dollars on celebrating Kim Il Sung's 100th birthday in April this year and launching a space rocket in a disguised test of a long-range missile.

North Korea produces up to two tons of gold every year in mines, mostly in the northwestern provinces.

The North is to convene its rubber-stamp parliament Tuesday in a rare second session of the year.

Experts said the Supreme People's Assembly was likely to approve measures aimed to rejuvenate its moribund socialist economy with moderate market-style incentives in order to support the third-generation succession.

(END) Dow Jones Newswires

September 24, 2012 22:05 ET (02:05 GMT)

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