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Report: Kim Jong Un slush fund raking in revenue from North Korea coal trade

By Elizabeth Shim
Demand for North Korean coal in China has surged due to production cutbacks. Kim Jong Un has ordered revenue from coal exports be directed to a slush fund under his direct supervision, according to a recent report. File Photo by Stephen Shaver/UPI | <a href="/News_Photos/lp/fe693c05d817faa515798a7227eba2e7/" target="_blank">License Photo</a>
Demand for North Korean coal in China has surged due to production cutbacks. Kim Jong Un has ordered revenue from coal exports be directed to a slush fund under his direct supervision, according to a recent report. File Photo by Stephen Shaver/UPI | License Photo

SEOUL, Oct. 27 (UPI) -- North Korea's coal trade with China is thriving, and trade revenue is being funneled to Office 39, a fund reserved exclusively for Kim Jong Un.

A source on North Korea who spoke to Radio Free Asia on the condition of anonymity said the regime has been "struggling" to raise foreign currency.

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In response to the deficit, the North Korean leadership ordered all revenue from coal sales originating from major mines across the country be allocated to Office 39, Kim's personal slush fund.

"Trading companies under the supervision of the military are having trouble securing coal for export" because Kim's edict is sending all coal to a trading company under Office 39, according to the source.

RELATED U.S., Japan, South Korea urge North Korea to give up nuclear weapons

North Korea has been riding a surge in coal prices.

North Korean coal prices have increased 68 percent in recent weeks, as China began curbing coal production in 2016 and two major Australian coal mines have shut down, The Wall Street Journal reported Tuesday.

The average price of North Korean coal in China increased to $90 a ton from $59 in August, according to the report.

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In the third quarter of 2016, North Korea has so far exported $280 million worth of anthracite coal, a 5 percent increase from the same time period in 2015, South Korean news service Newsis reported.

A second source in North Korea based in China said North Korean mining executives and party secretaries have asked for welfare benefits for mine workers, in exchange for handing over the coal resources to the North Korean branch specializing in foreign currency earnings.

Revenue earned from coal sold in China have been directly linked to Pyongyang's continued development of nuclear weapons.

RELATED North Korea crackdown on crime leading to surge in bribes, report says

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