Odds ‘n’ Sods: Visiting gold mines in the DPRK

It was 1993. After disappointment with the Louwanzhai gold mine in Yunnan, my employer Normandy Mining wanted a break from China, and we were getting encouragement in Laos with our copper and gold exploration.

A few years later, this foray into Laos would develop into a major discovery that would become an operating mine by Pan Australian Resources. This was good news for me, as Normandy chairman Robert de Crespigny awarded me a bonus if any mines were discovered in the mineral portfolio I managed. The Laos discovery fit this, and my second wife Natasha and I got a major payout in 2004.

Normandy had recently formed an international joint venture with the French government named La Source. It was owned 50% by Normandy, who managed the business, and 50% by the government’s Bureau de Recherches Géologiques et Minières (BRGM).

Through La Source, a number of mining proposals were brought to Normandy for review, some in South America, many in Africa, where BRGM was active, and a wild card: some gold mines in North Korea.

Robert said he didn’t have any senior geologists willing to go to the Democratic People’s Republic of Korea (DPRK), and asked if I would go. I jumped at the chance, since I had already been tantalizingly close to North Korea, looking at gold mines in northeastern China.

He put me in touch with a Japanese trading company, Hitachi Shoji, who apparently did a lot of business each year with the Korean gold mines, providing critical supplies and equipment.

In Beijing, I met with Hitachi Shoji’s managing director and his personal assistant, who spoke English and Korean, as well as his native Japanese. I was told his mother was from Korea and father Japanese.

The three of us then met in DPRK’s embassy compound in Beijing. The late afternoon meeting was held in a state room — a vast, cavernous hall with 50 tables, but only ours had been set. We were joined by Korean mining engineers, a vice-minister of mines and a vice-president of the Daesong Development Bank of the DPRK, who spoke excellent English and was the official translator.

The banquet was typical Korean style of cold meats, smoked fish and kimchee. The only hot dish, temperature-wise, was the turtle soup — more in deference to our Beijing location. The cold meatballs reminded me of eastern European food, something like Hungarian goulash.

The conversation did not start well, as I opened up with a request for the previous year’s gold production.

This produced a long silence, until eventually the banker said, “David, I am told this is a state secret.”

I said, “Well, for starters” — and I was quoting from Gold Fields Mineral Services in London — “the latest report had DPRK producing 16 tonnes gold in 1992.”

This led to an animated discussion with the banker, who said, “David, we are amazed that you have this information. However, if you add our alluvial gold production, we actually produced just under 20 tonnes in 1992.”

From then on I was treated professionally and given full access to all their mining data. I was, after all, on my own. I feel the reception would have been different had I been accompanied by lawyers and financial advisors.

The meeting ended on a positive note: I was handed a four-page folded visa to insert into my passport, and the banker said, “DPRK welcomes your visit. This loose-leaf visa will be removed on arrival, so there will be no record of your visit to DPRK — we do not wish you to have issues in your overseas travel.”

I was sure, however, that there would be a record of my visit in DPRK embassy files, which would be forwarded to Pyongyang for their record and use.

The next morning the three of us flew from Beijing on Air Koryo — the state-owned national flag-carrier airline of North Korea — in a Russian Tupolev 154, a twin engine jet, much like a Boeing 727.

The pilots were all ex-military, but perhaps not “ex,” based on our descent into Pyongyang, which was steep like a dive-bombing mission. On the final approach I could see the airport had a double cyclone chain fence with guards and dogs patrolling, and manned anti-aircraft gun bunkers at each end of the runway.

We pulled up at the arrivals apron, steps were rolled out to the aircraft and we descended. A party of officials stood to one side as we walked towards the terminal.

One smaller man in a military greatcoat wearing a smart trilby hat stepped forward.

“Dr. David,” he said. “Please follow me.”

We passed through a guarded side gate to a waiting black Mercedes 180-D, engine running. As I waited in the car, a man who identified himself as “Mr. Pang” took my passport and disappeared into a side office. Minutes later he appeared, and the passport was returned, minus the loose-leaf visa.

We drove a half-hour into the town centre to the Koryo Hotel, a huge building that had an air bridge connecting the two towers on the twentieth floor, and a revolving restaurant on the twenty-fifth floor. (This was several years before the Malaysians built the Petronas Towers in Kuala Lumpur.)

I was shown by a tall, demure hostess to my presidential suite on floor 24, just below the revolving restaurant and outfitted with a huge bedroom and a separate sauna and bathroom, complete with a tiled urinal fit for an English pub.

There was also a sitting room with a coffee table and formal chairs, and in an alcove near the window stood a massive desk with a leather director’s chair. On one side of the desk I noted an old Bakelite rotary telephone.

I asked the hostess if I could call my home in Australia, and she replied, “One minute, sir.”

Next, Pang was there, and he answered, “Give me half an hour to arrange, then dial ‘00,’ your country code ‘61’ and your number. Also let me explain that I will accompany you on all mine visits and any cultural sites we see. For the next 10 days we will work together — it is for your protection.”

I called home, but my wife Jenny was out — no doubt shopping — so I called my son Chris who lived close by in an apartment. His wife Susie answered, and was surprised I was already in North Korea, and said, “Dave, we’re worried about the nuclear threat against Seoul — it’s a major news item on CNN.”

At these words the phone was jammed with an electronic buzzing. I called back 10 minutes later and before she could speak, I told her I was keen on a long-range weather forecast, as I was to fly the following Saturday, and asked if there was a cold front on its way from the south, or if the conditions improved for the weekend.

Susan had the gumption to hear what I was really saying, and quickly said the weather looked great for the coming weekend. I told her it was too expensive to call again.

Several days later, when I reported back to Robert de Crespigny in Adelaide, word had got to him of my phone tapping, so he joked that he had to discuss any business matters in code, as he believed my “girlfriend” was listening.

When I confronted Mr. Pang with this, much later when I was leaving the country, he said, “David, your phone is of course recorded for your protection, this is standard procedure for all foreign visitors.”

There was no denial and the bluntness of his reply was actually rather reassuring.

That first night in North Korea I dined alone in the huge dining hall at the hotel. There seemed to be few guests — granted, it was winter, but this did not seem to be even a place for business, let alone tourists. And this was in a city of over 2 million within a country of 22 million, which was more than Australia’s population at the time.

The whole situation seemed unreal, and it took me a long time tossing and turning in my bed in the presidential suite to get to sleep.

The next morning Pang collected me and we went over the proposed mine visits in the Mines Ministry offices. Five mines were discussed, the last one a development proposal that was not yet in production. However the latter sounded interesting: a large deposit that could be mined by open pit, and claimed to be free milling — that is, the gold was easy to process and recover. All the other mines were producing and indeed historic operations.

We spent the afternoon at the Kim Il Sung assembly hall and plaza, with formal gardens and huge monumental bas reliefs in bronze of the loyal troops battling the Americans in the 1953 war. Dominating all was an oversize bronze statue of “The Great Leader” Kim Il Sung.

Here there was no doubt which side had won. Indeed, with China’s help, they had prevailed and continued as a buffer state with South Korea. This venue is still a favoured place for young couples to get married, and that morning two bridal parties were being photographed against the Bronze Warrior sculpture.

Later Pang took me down the main central boulevard — six lanes of traffic and a central concrete roadway with dual rail lines for trams, although none were to be seen. I commented that there were no trees or indeed street lights, beyond low-profile side lighting.

Pang explained this dead-straight boulevard extending 2 km was also their emergency runway. He pointed out a huge “fire station complex” that was not for fire engines, but the doors could slide back and fighter jets could be brought from deep bunkers by lifts to street level.

As he explained with pride, “the Americans use aircraft carriers, but in DPRK we must rely on this runway for our defence.”

We descended via a subway to one of the central underground stations on a rail link running right around the central city area. I noted they were much deeper than the Melbourne loop trains I was accustomed to, and at a sublevel plaza, huge sliding doors could be brought across to seal off the deeper station level.

Pang went on to tell me that each station had vast accommodations, clinics, restaurants, schools and government offices, and that “we can evacuate the centre of Pyongyang in a short period, given a nuclear attack. We have to be prepared.”

I thought about this having been done in London during the air raids in World War 2, but even that was a long time ago. This was “1984 gone viral” in 1993.

It left me speechless, the rather grim apartment blocks, all a uniform 22 stories high, on each street in the central area and housing office and factory workers. There were few shops beyond essential services and few private cars, with the traffic all buses, trams and government vehicles.

It reminded me of an equally grim visit I made to East Berlin in October 1958, and that had been over 30 years ago.

Later we walked around the park, with young couples pushing prams and walking with smiling children to a simple workers’ cottage of the kind Kim Il Sung had grown up in. He was actually born in a remote border region in northern DPRK, but this modest cottage, I was assured, was a faithful copy of his first home.

Pang told me, “Tomorrow, David, we will drive to our first gold mine. It is 200 km north of here, and we leave at 8 a.m.”

 

Changlin

The next morning at 8 a.m. exactly I was collected by the same driver who had brought me from the airport, in probably the same car.

Within an hour we were well out of Pyongyang, and the countryside opened up to rolling hills and broad, flat valleys. Whilst there was some cultivation of crops like maize, green vegetables and potatoes, there seemed little stock, either cattle or sheep. Perhaps it was largely market gardening for Pyongyang.

I had fallen asleep and awoke with the vehicle stopped at a boom gate and guard house, and Pang announcing we had arrived at the Changlin gold mine.

A burley smiling giant of a man climbed in the front seat with the driver. Pang introduced him as “Kim the mine manager.”

I assumed we were on our way to the mine office, but the car drove directly to an adit portal. We paused, honked our horn and drove into the production decline. The slope was gentle and the workings well lit, as we turned off the decline into an active stoping area.

The vehicle pulled up beside the rock face and I got out, to the concern of Pang.

“You must stay in the car, please. You are a VIP, and we are concerned for your safety.”

I told him I had no intention of compiling my report from the back seat of a Mercedes. (Indeed, it was the first time I had been driven underground in an airport car.)

Armed with my geology pick I advanced to the stope face. Kim stood beside me and offered me a hard hat, showing at least some respect of OH&S standards.

The quartz-carbonate-pyrite reef they were mining was just as I had suspected from the reports I had read. The geological setting was familiar, no surprises here.

We went on to examine a few other areas and eventually drove back to surface. In rather the reverse of a normal mine visit, we then walked to the mine office where tea was served as we reviewed operational plans and sections.

An aerial view of the Changlin mine, with rock spoil in the lower centre of photo. Photo by David Tyrwhitt.

I made extensive notes and questioned them on monthly ore-mining rate, processing tonnes and grade. They were quick to answer all my questions, and none of the statistics were out of line, beyond the grade at just over 3 grams gold per tonne. (This was low by Australian standards for an underground mine. Only Mt. Charlotte in Kalgoorlie could do this, and it did not make much money, even when efficiently run by Western Mining Corp.)

It was my introduction to “social metal” — where the question of mine cost per ounce of gold produced is irrelevant and the key number is annual production, compared with the mine target.

Here at Changlin they were seeking to mine 1 tonne (32,151 oz.) gold for 1994, and they were well on target.

All the political bosses in Pyongyang were concerned with was the country making 6 tonnes gold that year, and Changlin could provide 20% of this.

I noted to Pang that Normandy was mining over 7 tonnes gold a year in Australia, and we were expanding several operations to bring this to at least 10 tonnes by next year — Changlin looked too small for us to consider for a joint venture.

Pang responded that we would need to return to Pyongyang and discuss this problem with the Mines Ministry. Apparently they had larger mines they wished to show me.

 

Unsan

That evening over dinner Pang and the mining engineer laid out a tour of the Unsan mine, over 300 km northwest of Pyongyang, close to the border with China. We would also see the large-scale alluvial dredging in the Unsan river, although this operation had been shut down over winter, as the river had frozen solid.

I was told we would fly to Unsan in a Russian twin-blade helicopter — those huge transport choppers used for troop movement. At the airport the next morning the chopper was painted in camouflage and the pilots were in air force uniforms, but the interior had been padded with poor-quality fabric and rough curtains. The seats were benches facing each other, with sash seat belts.

We flew northwest for over an hour and then descended. Below lay the Unsan river valley wide and flat, clearly recently glaciated, as was much of the landscape carved in the last ice age.

The mine workings came into view and were smaller than I had expected. We circled over the office and landed in a recently cleared maize field, with the helicopter skids crushing the harvested stalks.

The door slid open and two military jeeps with armed soldiers arrived. Guards were posted at the silent chopper and we piled into the other vehicle.

At the mine site I was shown serious bomb damage — supposedly from 1953 — to the old milling operation, which now stood as a ruined shell. The more compact modern plant was on lower ground, and some of the original crushing operation had survived the bombs and been refurbished.

The scene was one of desperation in salvaging what must once have been a significant operation.

Locos emerged from a production adit and dumped ore into a run-of-mine stockpile near the crusher. This was in turn removed by a large Komatsu front-end loader, no doubt provided by Hitachi Shoji.

The plant was 100,000 tonnes per annum, judging by the single small ball mill. I had been told the mine produced 20,000 oz. gold a year, but that they were expanding to over 30,000 oz. gold.

This was still small by Australian standards, and they clearly depended on the alluvial workings for the claimed total production. Again I was told to “wait until you see the larger mine Rakyon, south of Pyongyang,” which was producing almost 3 tonnes gold per annum.

After looking over some mine plans and drill core samples, we were taken to a prospective location on strike of the lode about a kilometre north of the workings. Two drill holes were shown on the section, each with good grades, but deep and over narrow widths. The high-grade lode was only a little over a metre true width.

Allowing for mine dilution, I guessed the grade would fall below 10 grams.

More concerning to me was that the geologists had joined the two hits over 200 metres apart and over 200 metres below surface to calculate a reserve of five tonnes gold.

I said in Australia we have strict rules on the publication of reserves and resources, and they would require at least 10 times as many holes to prove this.

They replied that they had no money to drill more holes, “so the reserve is our best guess.” Rather than argue I suggested that the estimated five tonnes gold, which could only be mined underground on a small scale, would be far too small for Normandy to consider, and therefore we would not be investing.

We headed back to the waiting helicopter and as we arrived, the guards were standing at ease looking at the chopper, their backs to us. A stiff breeze was blowing, and they hadn’t heard our jeep approaching. One guard was smoking, and his fellow guard was much at ease leaning on his gun.

I saw a great photo opportunity, so I walked over to one guard and gently tapped him on the shoulder. He spun around, caught off guard with his AK-47 at his side. Holding up my camera I showed him my intention was hardly aggressive, and he heaved a sigh of relief, stood to attention and with a wide grin posed for the photo.

It was my best mining photograph of the trip, and I used it at the next Normandy Mining managers conference.

 

Rakyon

The last visit was to the Rakyon mine, 100 km southwest of Pyongyang, close to the DMZ and South Korea. The geology was reminiscent of vintage Kalgoorlie — a combination of Great Boulder and Lake View mines, which I had visited in the mid-1960s, when I first arrived in Australia. The geology, mining and processing methods were all identical, and all underground.

The ore was however rather refractory, with a high arsenic content, and as a consequence the mine shipped a sulphide gold concentrate to a smelting and refining complex in China’s Shandong province. Whilst this was a short distance across the Bohai gulf, it again brought home to me how dependant DPRK was on China.

The Rakyon mine had 3,000 people working underground on three shifts, and the mill or concentrator on two shifts. Kalgoorlie was labour intensive, but not like this. Even accepting the figure of 100,000 oz. gold production per year, this added up to one man per kilo of gold produced.

Even with low wages this was an expensive operation, again an example of social metal. I am sure the true cost per ounce was well over US$1,000, and in 1993, we had gold selling at US$350 per oz.

DPRK wanted 20 tonnes gold a year, the mines in aggregate produced it, and the cost of that production was not critical to them.

However the cost per ounce certainly would be for Normandy, if we were to consider investing.

Our final banquet was a pleasant occasion, attended by another Kim, this time the Minister of Mines. The food was ordinary, but the atmosphere was lifted by some powerful local white spirit and imported brandy, together with endless bottles of local beer. One retired engineer regaled the party with a fine tenor voice singing European opera.

We were then joined by a demure and proper group of young ladies. Dance music started and we had over half an hour of dancing. This was strictly ballroom and the couples kept conservatively apart. These were no Geishas.

At the evening’s close I said a few words of thanks for the opportunity and that Hitachi Shoji and I would discuss our strategy, and I would report to my chairman Robert de Crespigny on my return. And if we could help them with exploration at the newly discovered deposit, I hoped we could return to discuss this.

As the delegates left, Minister Kim came across to me. He was well over six feet tall and looked strikingly like Leonid Brezhnev.

Without warning he embraced me in a bear hug, kissed me on each cheek, and through an interpreter said, “You came as an international expert in mining, and you leave as a friend of North Korea. Please come again.”

In my last day I followed up a request from Dr. Bobby Danchin, then managing director of De Beers for Australasia. He had asked if I could get some samples of kimberlite rocks he suspected occur just over the border from Heilongjiang Province in northern China.

I raised this with Pang, who discussed it with the Mines Department leaders. In due course I was driven to a research facility on the outskirts of Pyongyang. In their laboratory I was introduced to the director general of the facility. He spoke good English and had spent time at an American university.

He knew all about De Beers, and said this would be the deal: “I will provide rock samples, drill core and basic geology maps of our area for you to take with you tomorrow on your flight back to Australia. I want De Beers in their South African research laboratory, probably the best in the world, to examine them and give me a report.”

I paused to say I was only a consultant representing De Beers, but would phone Dr. Danchin, whom I knew well. Within minutes on a mobile I had reached Bobby, who immediately agreed, and said: “David — wonderful and amazing. Go for it.”

The samples travelled with me safely back to Melbourne. Bobby had them air freighted to Johannesburg, and on my return visit I presented DPRK research laboratory with a copy of the report.

Unfortunately the kimberlite pipes were unusual, being chemically a little different from true kimberlites, and as a result De Beers felt they would be unlikely to yield diamonds. Nonetheless, I had played a role in solving a 30-year mystery for De Beers.

My final breakfast of that first visit was eaten alone in the vast dining hall of the Koryo Hotel.

I asked to settle my hotel bill, which was promptly handed to me. It was quite reasonable for the time spent, and I noticed no charge for my taped phone calls.

I handed over my Amex card, the only corporate card I carried, but the woman said it would not be accepted. As I only had a few Australian dollars on me, that was a problem. She spoke with her supervisor, who came out to tell me the hotel would never accept Amex, because “we have a very poor arrangement with the Americans.”

Eventually he said that “Mr. Pang assures me you will return. 
Next time please bring traveller’s cheques, and this time, we’ll accept Amex.”

Looking back, only I could have been that naïve to expect DPRK to accept an Amex card.

 

— David Tyrwhitt, PhD, began his career in 1959 as a diamond exploration geologist with Williamson Diamonds, a subsidiary of De Beers. He joined Newmont Mining as an exploration geologist in 1966, where he was responsible for discovering the Telfer gold mine in Australia in 1972, going on to become the founding CEO of Newmont Australia Ltd. (1984 to 1988). From 1988 to 1991, he was CEO of Ashton Mining Ltd. in Australia. Since 1991, Dr. Tyrwhitt has worked as a mining consultant on international projects and is currently a director of four mining companies, including Hawthorn Resources and Merlin Diamonds in Australia, where he resides.

The preceding is an edited excerpt from his unpublished memoirs.

[Editor-in-chief’s note: Our Odds ‘n’ Sods column is dedicated to our readers’ remembrances of funny, poignant or intriguing tales from their careers in mining. If you’d like to share your story, please send it to jcumming@northernminer.com.]