Bustling steel plant contributes to economic growth of sanctions-hit North Korea

A worker checks the temperature of molten steel during production at the Chollima Steel Complex, south-west of Pyongyang, on July 22, 2017.
A worker checks the temperature of molten steel during production at the Chollima Steel Complex, south-west of Pyongyang, on July 22, 2017.PHOTO: AFP

CHOLLIMA (AFP) - A crane moves a giant bucket brimming with 40 tonnes of molten steel towards a gangway in North Korea's Chollima Steel Complex. Flames, smoke and a shower of sparks erupt as a worker thrusts his temperature gauge into the liquid, its tip glowing white-hot as he withdraws it.

Ratcheted high up through a cavernous mill, which contains six separate furnaces, the steel is poured into a press that extrudes it into ingots weighing hundreds of kilogrammes each, still glowing red as they plunge into a pool of water to cool.

In front of it hang two banners. "Let us produce steel bars regularly at a high level!" reads one. "Single-minded unity," proclaims the other.

The plant, south-west of the capital Pyongyang, has around 8,000 staff and is one of the biggest in North Korea, operating in a sector vital to the economy of the isolated, sanctions-hit country.

Production has averaged 500,000 tonnes annually over the past three years, according to deputy chief engineer Kim Gil Nam. The number is slightly lower than the figures from the 1980s on display in a visitor gallery - 517,944 tonnes in 1987, for example.

He would not be drawn on its full capacity, and whether output was rising or falling, but two of the six furnaces were undergoing maintenance when AFP visited.

Nuclear-armed North Korea, which carried out what it said was its first successful launch of an intercontinental ballistic missile (ICBM) on July 4, is subject to multiple rounds of United Nations sanctions over its atomic and rocket programmes, and its creaking state sector suffers perennial shortages of equipment and spare parts.

Pyongyang does not issue any official economic statistics, not even GDP growth, regarding such numbers as state secrets, so no national steel production figures are available.

But Mr Kim - who has "Safeguard the country" tattooed on his left forearm, a souvenir of his graduation from middle school - insisted that the plant's operations had not been hit by the measures.

"Our great president Kim Il Sung built a plant in the 1960s that can produce the raw material under any sanctions racket," he said. "So although we say we are short of iron on a national level and we are short of this and that, our complex has not really been affected by the sanctions racket by US imperialists."

The steel plant was first built in 1939 when Korea was a Japanese colony and occupying authorities concentrated industrial development in the northern part of the country, regarding the south as an agricultural breadbasket.

Destroyed in war, it was later rebuilt and expanded by the Democratic People's Republic of Korea (DPRK), as the North is officially known, and renamed Chollima after a mythical winged horse that can run 1,000 li - an Asian measure of distance with the Korean version equivalent to around 400m - in a day.

A mosaic outside depicts the North's founder Kim Il Sung giving orders for its reconstruction in 1953, and the concrete block on which he is said to have sat is preserved for posterity in a glass box.

When a 10,000-tonne press was installed, the machine was awarded the North's Hero of Labour medal.

Under United Nations Security Council resolution 2321, passed in November last year, North Korean exports of iron and iron ore are banned, unless the transactions are "determined to be exclusively for livelihood purposes" and do not generate revenue for Pyongyang's banned weapons programmes.

But two-way trade between the North and China, its key ally, business partner and diplomatic protector, jumped in the first five months of this year, despite US President Donald Trump urging Beijing to do more to rein in Pyongyang.

According to figures from Chinese Customs, the country imported just over 100,000 tonnes of iron and steel from North Korea in the period, worth around US$30 million (S$41 million).

The South's central bank estimated this week that the North's economy grew 3.9 per cent in 2016 - its fastest pace in 17 years, driven by increasing private-sector activity - with production in heavy and chemical industries up 6.7 per cent.

All production from the Chollima complex is consumed domestically, Mr Kim said.

He was not sure whether steel from his plant was used in the North's ICBM - which leader Kim Jong Un described as an Independence Day gift to the US after supervising the launch - describing the issue as a matter for the state.

"But since we produce steel, I believe we have contributed," the deputy chief engineer added. "The world is talking about our launch of the ICBM and I think it is the pride of not only our complex but also of all the people."