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S.Korea says plans liaison office in North
Updated: 2004-11-03 12:36

South Korea plans to open its first liaison office in North Korea early next year, a senior South Korean official told Reuters on Wednesday.

Park Yang-soo, president of the state-run Korea Resources Corporation, said he would visit Pyongyang next month to discuss the plan and ways to cooperate with the North, which has big mineral deposits yet lacks cash and technology to exploit them.

"To cooperate on economic development between South and North Korea, our state-run corporation plans to set up a liaison office or branch office for raw materials in Pyongyang next year," he said at his agency's unassuming headquarters in Seoul.

South Korean Unification Ministry officials confirmed the South, which is technically still at war with the North and does not have diplomatic relations, had never had a liaison office of any kind in the communist state.

The corporation supports domestic mining and invests overseas to secure mineral resources for the export-driven South Korean economy, which is Asia's third largest. South Korea has few raw material resources of its own.

"Our liaison office in Pyongyang would be the first one, different from the Kaesong industrial complex," Park said, referring to an industrial park being built just over the Demilitarised Zone frontier in the North where South Korean commercial companies will use cheap North Korean labor.

"I will visit North Korea at the end of this year," Park said. "We are indirectly talking to North Korea in a third country, and hearing positive answers."

Park said the office needed to open by May and would just handle liaison on resources development.

North Korean officials could not be reached for comment.


The South has used trade offices in the past, notably in the former East bloc, as precursors to diplomatic links. However, Park made clear his remit was not political.

Park said the North had 30 times the amount of mineral reserves found in the South and much of it was as yet untapped.

An initial $5.1 million project to mine graphite would come on stream in May next year and produce between 10,000 and 12,000 tonnes a year. It will be shipped to the South. Graphite is used as a lubricant and in electrical components because it conducts electricity.

North Korea has introduced some market reforms but its economy is still barely functioning, experts in the South say.

"North Korea's raw material development is held by its military because it's strategic, key places are in the mountains and those mountains are controlled by the military," said Park.

He said he thought the military's vested interest could help to ensure cooperation would work smoothly.

Diplomats in the South say relations between the two Koreas are rocky, in part because of the North's nuclear programs. Pyongyang has also accused Seoul of seeking to absorb the North in the same way West Germany merged with the communist East in 1990.

Park said one role of his agency was to prepare both Koreas' economic development through developing mineral resources for possible unification.

"We have capital and techniques, while North Korea has raw materials and labor forces," Park said.

"We will support North Korea technically such as with exploration, research and drilling if they want to develop raw materials by themselves," he said, adding the liaison office would help with that.

"Through developing raw materials, both South and North Korea will have economic profits," he said. "And it will resolve politically sensitive things because it is a pure approach."

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