Night Watch

North Korea: During the past week international news services have repeated a South Korean news service report that North Korea has up to 20 million tons of rare earth metal ores in its mountainous interior. This estimate would make North Korean deposits second only to China's and possibly worth $6 trillion, according to press accounts.

All of the recent reports seem to stem from meetings late last year between North and South Korean mining concerns about how best to exploit the rare earth ores. In those meetings, the North delivered to South Korea samples of the ores for evaluation. Since December the North has not responded to South Korean offers to provide their assessment of the quality of the ores.

Meanwhile, Chinese interests have injected themselves to exploit the ores. Last year, Chinese and North Korean authorities agreed on a Chinese proposal to develop rare earth mines in North Korea, but the details were never published.



Comment: The location of the rare earth ore deposits appears to be a state secret. South Korean media reported the North Korean deposits would make it the second largest source of rare earth metals, after China. China wants to control the market that South Korea is trying to penetrate.

This is potentially a game changing development on the peninsula because demand for and the price of rare earth metals continues to skyrocket. They are essential in the manufacture of modern telecommunications equipment.

A thriving rare earth metals industry in the North could make the country more prosperous than it ever has been. There is no confirmation of South Korean estimates of the size of the North Korean deposits, but the Chinese and South Korean competition for exploitation rights and agreements is a strong indication that they are worth the competition.

Weapons exports have been the North's single most important source of hard currency since the death of Kim Il-sung in 1994. North Korean weapons are based on Cold War designs. Even with upgrades and modernization, they are obsolescent and a declining source of revenue. Libya and Syria are among the North's most important clients who will never buy again. Pakistan and Iran remain the top clients.

Extraction and processing of rare earth metals hold the potential for a transformation in North Korean economic fortunes. The North would never need to sell weapons again and could become much more prosperous. However, the industry would need even more energy for processing the ores, for which nuclear-powered electricity plants probably would be essential.

Development of rare earth ore mines also would have a politico-economic impact because North Korea must look initially to China for assistance and expertise. China is the world's leading producer and exporter of rare earth metals. A richer more prosperous North Korea with a steady source of revenue would have much more leverage in negotiations on almost any matter.

Open sources contain little useful, recent information about Chinese intentions to develop North Korea rare earth ore deposits. North Korean mining authorities may be depended on to try to limit Chinese influence or dominance of a domestic Korean industry. That means there will be investment opportunities for South Korean firms and their Western backers.

No news services have provided an estimate when new mines might become operational.

Pakistan: The Inter-Services Intelligence (ISI) Directorate reportedly is planning to hold a meeting with 1,500 imams and the Afghan Taliban in Quetta, Afghan newspaper Arman-e Melli reported 8 August.

Comment: The news services provided no explanation of the purpose of this planned meeting. What is important for Readers to note is the public statement that Pakistani intelligence knows how to contact the Afghan Taliban in Quetta.

In the past 12 years the US has insisted the Pakistanis do more to suppress anti-Afghan insurgents, but never the extradition or assassination of Afghan Mullah Omar's shura in Quetta. The Pakistanis tended to deny they knew where Omar was residing. Musharraf insisted he remained in Afghanistan. Today's announcement indicates Pakistani military intelligence always has known where he resides, with his in-laws on the outskirts of Quetta, most likely.

Eleven years into the fight Pakistani intelligence lets slip in public that it knows where Mullah Omar and his senior followers are. American leaders should be outraged by the pattern of Pakistani intelligence protecting Mullah Omar the same way it protected Osama bin Laden.

Without Omar and the Quetta/Karachi shura, the Taliban fighting groups in Afghanistan would run out of money to pay fighters and pay for ammunition and would devolve into local Pashtun hotheads and malcontents. The Pakistanis apparently have had the ability to stop Omar at any time in the past eleven years.

Syria: Free Syrian Army sources said that their forces killed Vladimir Petrovich Kodjayev, a Russian general, who advised the Syrian defense minister. They also said that they found important Syrian army documents during the same operation.

Comment: If this report is accurate, the Russians are giving the Syrian government more than diplomatic support, including operational advice, no doubt based on Russia's operations in Chechnya.

The opposition claim is probably accurate. Opposition allegations about the Iranian "pilgrims" they captured have proven to be quite accurate. Those pilgrims are ex- or current Iranian Revolutionary Guards Corps personnel or Iranian government officials, according to a statement from Tehran today.

When the opposition backs up a claim with captured documents that it offers to the press to review, the claim tends to be not exaggerated.


Egypt: Security. The government of President Mursi sent military reinforcements from the 2nd Field Army to Sinai to back up a military operation already underway to "purge" the peninsula and its mountainous areas, especially Jabal al-Halal area, from "terrorists."

The military operation began on 7 August and killed over 30 "terrorists" according to an official report. Surviving terrorists are being interrogated by competent bodies for more information about the whereabouts of partners, the news services reported.

Politics. President Mursi dismissed his intelligence chief, military police commander, the Republican Guard commander and the North Sinai governor on 8 August because of their poor performance related to the Sinai attack on 6 August.

Comment: The president's swift action shows he is willing to hold senior officials accountable for failures. He also has confirmed that the president has the authority to remove senior military officers, presumably with the concurrence of the Defense Minister, Field Marshal Tantawi. Nonetheless, the precedent is more important than the process at this stage in Mursi's tenure. The power struggle continues but both sides agree on the need for Egypt to be and be seen to be strong in responding to lawlessness.

End of NightWatch ###

NightWatch is brought to readers of Townhall Finance by Kforce Government Solutions, Inc. (KGS), a leader in government problem-solving, Data Confidence® and intelligence. Views and opinions expressed in NightWatch are solely those of the author, and do not necessarily represent those of KGS, its management, or affiliates.

www.kforcegov.com

A Member of AFCEA International

www.afcea.org


Night Watch

NightWatch is an internationally acclaimed nightly newsletter that tracks and assesses threats to US national security. It has an edgy, executive style unlike any other summary of its kind.
TOWNHALL FINANCE DAILY

Get the best of Townhall Finance Daily delivered straight to your inbox

Follow Townhall Finance!