“Uh… yes, ma’am.”
“Then I will cut to the chase. Adam, what do you know about the mining sector in China?”
Adam raised his eyebrows, surprised by the question for a few reasons, but at least, as far as the topic was concerned, he found himself on firm ground. “Quite a bit. When I was working undercover in Hong Kong as a corporate investigations consultant I had a lot of issues with two of China’s six state-owned mining concerns. Chinalco and Minmetals. They were stealing technology from Western firms, and I worked to bring these transgressions to light.”
“And what about rare earth element mining in particular?”
He was still off kilter because he was in an ODNI conference room with the top intelligence official in the U.S. government, but now he was more intrigued by this mysterious operation than he was by the manner it was being presented to him. “That’s huge over in China. They are the player in the industry, controlling over ninety percent of the world’s extraction and supply.”
“Go on,” Mary Pat said.
Adam smiled. If this was a test, he was about to nail it. “There are seventeen rare earth minerals, and they all occur together, so while a rare earth deposit might have a higher relative proportion of one of the minerals as opposed to another, a rare earth mine extracts all of the minerals together as ore, and then sends it off to be processed.
“Rare earths are divided into two categories: light and heavy.
“China extracts the majority of the world’s rare earth minerals for a number of reasons: Low labor costs and negligible environment standards for a process that is very hard on the environment allow them to price the goods cheaply. But the main reason for China’s supply-side dominance is the discovery of massive mineral deposits. They simply have more of the stuff than anyone else. Having said that, they also use more of it than anyone else. China ran into trouble due to its explosive growth. Its manufacturing sector began using more of the rare earths just as its demand for other commodities increased, and this left less available to export, increasing the cost of the commodity.
“Australia has been increasing its mining in the past few years, as has the U.S., but they are whistling in the wind in this industry.”
“Why do you say that?”
“China will always be at a competitive advantage with the West. They have absurdly low labor costs, their mines operate on government land without paying for the privilege, there are virtually no environmental regs for them there. We have some rare earth mining in the West, but we pay a lot more to get the commodity out of the ground and processed than the Chinese ever will.”
Calhoun slapped Yao on his back, startling him. He looked to Mary Pat. “I told you Yao would know his stuff.”
Adam clarified, “I know a good bit about the Chinese rare earth operations, the major players and the regions where they mine the ore. And I understand the technique of the mining and the ore processing in a general sense, but I sure couldn’t operate a gas scrubber at a rare earth mine or anything like that.”
Mary Pat said, “We don’t need you with a pick down in a shaft, but we were hoping you would already possess some knowledge about the industry.”
“That I do,” Adam said. He was humble about a lot of things, but he had been sitting in China, Hong Kong and then Singapore for the past few years totally engrossed in the Chinese economy. He had all the confidence in the world about his deep knowledge of it.
Mary Pat then asked, “And what about the illegal rare earth mining industry in China?”
“Sure,” he said, a little less confidently. “Gangster mines. Illegal private corporations run by Chinese organized crime have big REM mines in Inner Mongolia as well as other places. They are successful because local and regional governments benefit from them. The gangsters pay bribes and such.” He chuckled. “And if you think the government-run mines fall short of environmental standards, the gangster miners are a whole lot worse.”
Foley turned to Calhoun and nodded. Adam realized he’d passed some sort of a test, but he wasn’t sure what that had earned him. Calhoun leaned forward on his elbows. “We have one hell of a problem, and we have one hell of an opportunity.”
“You want to put me into a Chinese mine?” Adam knew the Chinese government had tried to kill him once, in Hong Kong. They got close, so close it was clear an intelligence breach had occurred that gave them information about Yao and his actions. He wasn’t crazy about working in China, and he felt awkward about the fact it looked like he’d have to remind these two in front of him of his unique situation.
But Calhoun shook his head and said, “No. We’d need you to go into China for a very short time to establish your cover, but we are confident we have a way to make that happen. Your ultimate destination would, instead, be somewhere else.”
Adam relaxed a little, but he was careful not to show it. “Okay, where do you need me to go?”
Mary Pat took over. “Your file says you speak Korean.”
“Just fair. I spent a semester in high school as an exchange student in Seoul, then I returned for a semester of college. Studied the language in school, and took a night class while doing NOC work in HK.”
The two intelligence executives nodded at the young officer. They knew all this already.
Adam asked the next question with some concern. “We are talking about me going into South Korea. Correct?”
When the answer did not immediately come from either Foley or Calhoun, Adam just muttered, “You’ve got to be kidding.”
Mary Pat answered now. “What would you say if I told you we have a way to get you into North Korea?”
“I would respectfully ask you to provide a little more information.”
The room was tense, but Foley laughed. “That is understandable. Nearly two years ago Chinese geologists and miners working in the DPRK found deposits in the mountains of the Chongju region near their northern border with China. They dug test shafts and confirmed the find, then began establishing the infrastructure for extraction.”
Adam had heard something about this, but it had never been on his radar enough to look into it more closely.
Mary Pat said, “Then, about a year ago, Choi Ji-hoon threw the Chinese mining concern out of his country.”
“Why?”
“We don’t know. Some contractual issue, perhaps? What we do know is his new minister of mining, a man named Hwang, has recently allowed a group of illegal Chinese mining industry personnel into Chongju to work at the mine. Clearly he’s smart enough to know DPRK can’t extract the rare earths without expert help. The gangster miners are crucial to his operation.”
“Sounds prudent.”
“This gangster mining company is very experienced and well organized, but they have specialized in extraction, not processing. The North Koreans have to process the ore themselves now, they can’t very well hand it off to the Chinese after canceling the Chinese contract, so the illegal operation has established a front company in Shanghai for the sole purpose of obtaining processing technology and brainpower from abroad.” She paused. “Are you with me so far?”
Yao just nodded, urging her on.
“This company has been in contact with a Chinese national working at a rare earth mineral mine in California. We only found out about it because we’ve had a surveillance package on the man for some time. Initially we thought the man was working for Chinese intelligence. He is not. Quite the opposite, actually. He is a gangster miner himself who managed to get hired in the U.S. to headhunt talent at NewCorp, the American mining concern.
“We have the ability to intercept communications between the gangster mining company and their agent in California. We know what the Chongju rare earth — processing plant needs as far as specialized labor. They are rushing to find the right people for the jobs, because in just two weeks they will be sending another group into North Korea to work at the mine and the processing plant. Our plan is to notify the gangster miners that he has recruited a Chinese American with knowledge of a critical piece of technology used in rare earth ore processing. That man, our man, will then fly to Shanghai to join the gangster miners, and from there go into Pyongyang along with the rest of the Chinese. He will go to Chongju under DPRK government control and work at the mine.”