Dec. 20 (Bloomberg) -- When North Koreans sing their national anthem, they celebrate the morning sun shining ``on the mountains and rivers, our country so rich in silver and gold.'' They might also sing about magnesite, zinc, iron ore and other metals.

The estimated value of North Korea's mineral resources is 2,287 trillion won ($2.47 trillion) -- 24 times greater than South Korea's, according to the South Korean Chamber of Commerce and Industry. Meanwhile, the South's economy is 35 times larger than the North's.

Global demand for raw materials to make products including cars, aircraft, flat-screen panels and cell phones is pushing prices for some minerals and metals to record levels. It is also pushing the impoverished communist nation to step out of isolation and take advantage of the potential wealth under its soil to attract foreign currency, buy necessities such as fuel, and spur growth.

``Whether North Korea can survive and rebuild its economy depends on how the government makes the best use of their natural resources,'' said Keiji Abe, a Japanese expert on North Korea's mining history and co-author of ``The Military- Industrialization of North Korea.''

North Korea's leader, Kim Jong Il, seems to agree. ``We have to improve mining machinery spectacularly in greater scale,'' he told workers during one of his so-called on-the-spot guidance tour at the Tanchon mining-machinery factory in August, according to a report from the official Korean Central News Agency.

Hundreds of Mines

From 1910 to 1945, when Japan ruled the Korean peninsula, companies including Mitsubishi, Mitsui and Sumitomo dug hundreds of mines in North Korea, some with reserves that now rival top mines elsewhere in the world, according to geological-survey records.

``In our country, we have a large variety of mineral reserves, including rare earths used in advanced technology, as well as zinc, molybdenum, lead and copper,'' Kim Chol Su, vice director of the National Reserve Development Guidance Bureau of North Korea, said in a November interview with the pro-Pyongyang Choson Shinbo newspaper in Japan.

Sixty-five years ago, Masayasu Nozaki, 89, worked at a Japanese tungsten mine in North Korea known as the ``Mine of One Hundred Years.''

``There was a town in the valley complete with a hospital, a housing complex, a school, a post office and shops,'' he said in an interview in Tokyo. ``Koreans and Japanese worked in three shifts; and we had adequate electricity, water and food supplies and a good transportation system.''

After decades of economic mismanagement, that's no longer the case.

Power Problem

Magnesite and zinc mines in Tanchon and Komdok districts, more than 100 kilometers from the Chinese border lack ``electricity and transportation,'' Choi Kyung Soo, chief of Mineral Resources Development in the South-North Korea Exchanges and Cooperation Support Association, said in an interview in Seoul.

``It will take a large investment to improve them,'' said Choi, who led a delegation of mining specialists to the North in the summer and fall this year.

Magnesite is an ore used to make magnesium, a lightweight metal popular for automotive, aerospace and electronic-equipment parts.

To attract this investment, North Korea is forming an increasing number of joint ventures, especially with northern and southern neighbors China and South Korea.

``There is economic cooperation with the South in light industries and mineral resources, and other nations are interested in our natural resources besides China,'' Kim of the North's reserve development bureau said.

Narrow the Gap

South Korea is trying to narrow the gap between the economies of the divided nation to prepare for eventual reunification. At an October summit, South Korean President Roh Moo Hyun and Kim agreed on economic projects worth $11.2 billion, the Hyundai Research Institute estimated.

In late November, 200 tons of graphite material from a joint venture in the North arrived at South Korea's Incheon port. That was followed by 500 tons of North Korean zinc, in the communist nation's first repayment to the South for economic assistance. The two countries also began regular railway-freight services this month.

Roh recently told local business executives that North Korea is emerging as a ``land of new business opportunities'' and urged South Korean entrepreneurs to invest there.

South Korea, Asia's fourth-largest economy, is playing catch-up with China, long North Korea's biggest economic and political ally. In a report last month, South Korea's Chamber of Commerce and Industry said China imported $274.5 million worth of minerals from North Korea in 2006, compared with the South's $59.7 million.

New Investments

In November, Chinese copper importer Wanxiang Resources Co. said it will help develop North Korea's biggest copper mine, in Hyesan. The same month, Chinese ambassador Liu Xiaoming said in a speech at Kim Il Sung University in Pyongyang that China approved 77 investments in North Korea between January and August worth $380 million.

Other countries are also interested. In October, a delegation from Singapore led by Lee Khoon Choy, chairman of Eng Sing Lee Investment Pte and a former ambassador to South Korea, visited North Korea and held talks with Prime Minister Kim Yong Il.

``We went there to explore business possibilities,'' Lee said in a telephone interview. ``We discussed mining, including iron ore and gold.''

Transforming all this opportunity into economic growth will depend on North Korea's ability to ``build up international credibility and reputation as a business partner,'' said Masahiko Nakagawa, a researcher at the government-affiliated Institute of Developing Economies in Chiba, Japan.

For a nation run by two dictators since its founding in 1948 -- Kim and his father, Kim Il Sung, who died in 1994 -- North Korea also must ``try harder'' to promote the quantity and quality of its mineral resources and assure investors ``there is no political risk,'' he said.

To contact the reporter on this story: Hideko Takayama in Tokyo at htakayama10@bloomberg.net

Last Updated: December 19, 2007 20:13 EST