North Korea Profit Opportunities

By now, you’ve probably seen the staged cry-ins in Pyongang.

Dear Leader, Kim Jong-il, went gently into that good night…

And someone decided to pony up a few won to put to put together the North Korean version of a flash mob.

Depressing? Yes.

But mostly because these folks — who would probably do just about anything at this point to put a little extra kimchi on the table — have no idea that below their feet sits a wealth of mineral resources.

And let’s face it, mining jobs are much more lucrative than acting jobs.

Of course, my sarcasm doesn’t change the fact that a child is now running a country that likes to shoot off missiles like a drunken 15-year-old boy with a case of bottle rockets and M-80s.

Yes, this is an uncomfortable reality that I choose to smother with jokes and dark humor. It helps me get through the day.

But there are some folks who have shrugged this stuff off.

Those are the wildly aggressive profit-seekers that have long been sniffing around North Korea’s massive mineral resources — a true treasure worth more than $52 billion.

A Starbucks in Pyongang

No one can say with absolute certainty how the transition of power in North Korea is going to play out.

No one really knows if this 26-year-old kid will be able to hold on to power. And if he can, no one knows if he’ll employ the same brutal dictatorial tactics as his father, or if he’ll lighten up… maybe open up a little Starbucks at Kim il-sung Stadium or a Whole Foods near the University in Sariwon.

But one thing is certain: If there is an opportunity to get at North Korea’s bounty of mineral resources, it will be fully exploited in no time.

As a 2009 report issued by The Chosun Fund notes, North Korea has substantial natural resources and is starved for foreign capital.

Sounds like a pretty enticing combination, if you ask me.

Goldman has also been sniffing around North Korea, noting in a global economics report that the GDP projections of a united Korea could exceed that of France, Germany, and possibly Japan in as little as 30 years, assuming North Korea exploits its rich mineral wealth.

Of course, 30 years is pretty far off.

And the question is, even if foreign investment moved in tomorrow (aside from China and Russia, who have already exploited a small amount of North Korea’s mineral wealth), as an individual investor, can you even get a piece of this action?

And if so, would it even be worth the risk?

$5.3 Billion Up for Grabs

Look, I’m all for taking a little risk now and again. You know what they say: “Fortune favors the daring.”

But North Korea is a place I’ll allow the true adventure-seekers to chase. I just don’t have the stones for that kind of action — especially since North Korea probably offers one of the least attractive ways to profit from rare earths and precious metals.

And why the hell would I even consider the risk anyway, when just 2,500 miles away sits enough of this stuff to supply the entire world for 100 years?!

I’m serious.

Over the next few weeks, there will be plenty of coverage on North Korea’s mineral wealth. And it’ll certainly be interesting. We’ll hear all about the enormous undeveloped potential of North Korea… and all the opportunities to exploit it.

But meanwhile, right now in Alberta, there’s a single company that boasts $5.3 billion worth of rare earths and precious metals.

We’re talking more than 612 million pounds of metal wealth spread over 700,000 acres.

At this very moment, the total value of all of this operation’s metals exceeds the company’s market cap by more than 74,000 percent.

And I could hop on a plane tomorrow and walk the property if I wanted to.

So why would I even consider the “potential” of North Korean mineral wealth (something that China will end up controlling anyway), when with the click of a mouse, I can buy shares of one of the largest rare earth and precious metals operations in the world?

To a new way of life and a new generation of wealth…

Jeff Siegel

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Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.

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