HBOil JSC, an oil trading and refinery company based in Ulaanbaatar, Mongolia, acquired 20 percent of the North Korean entity Sungri refinery in June 2013, valued at roughly $10 million. In May 2014, the company opened a joint venture in Pyongyang.
The ex-communist country established bilateral ties with the North in 1948, but after this recent decision, the already impoverished North Korea will be further isolated from the international community.
“Mongolia is sending a message to North Korea: don’t fall down the wrong path,” said Nam Sung-wook, professor at Korea University’s Department of North Korean Studies.
North Korea formerly attracted foreign investment to resume operations of the Sungri refinery, which stopped running in 2009, in order to push for economic development. The deal with Mongolia, begun almost three years ago, was taken as evidence that North Korea wass seeking further investment partners-in addition to China.
However, the North Korean government continually delayed the inland oil development project, failing to provide reasonable explanations. Mongolia may therefore have concluded that there was no practical benefit to continuing the project.
Bilateral ties between the two countries recently turned bitter when Mongolian president Tsakhiagiin Elbegdorj said Mongolia could not endure the North’s tyranny forever, a remark made during his speech at Kim Il-sung University in Pyongyang at the end of October 2013.
“No tyranny lasts forever. It is the desire of the people to live free, that is the eternal power,” the president said in his speech. After his remarks, North Korean leader Kim Jong-un expressed disappointment and refused to hold meetings with the Mongolian president.
BY SUH JAE-JOON [email@example.com]