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North Korea Preparing for Nuclear Test, South Korea Says

Photographer: Pedro Ugarte/AFP/Getty Images

A North Korean soldier stands guard in front of an Unha-3 rocket at Tangachai-ri space center. Close

A North Korean soldier stands guard in front of an Unha-3 rocket at Tangachai-ri space center.

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Photographer: Pedro Ugarte/AFP/Getty Images

A North Korean soldier stands guard in front of an Unha-3 rocket at Tangachai-ri space center.

South Korea warned that North Korea may test a nuclear weapon after a planned missile launch this month that is already raising regional tensions the most since Kim Jong Un in December succeeded his father as head of the totalitarian state.

North Korean activity at the Punggye-ri atomic testing site is consistent with preparations for previous detonations in 2006 and 2009, a South Korean intelligence report obtained yesterday by Bloomberg News said. South Korean stocks fell to a one-month low while defense shares surged by the daily limit of 15 percent.

China, South Korea and Japan expressed concern over North Korea’s plan to put a satellite into orbit with a long-range rocket between April 12 and 16, which the U.S. says would scuttle a food aid deal. The launch, which will mark the 100th anniversary of the birth of state founder Kim Il Sung, threatens to overshadow South Korean elections tomorrow.

“The timing is impeccable,” said Park Young Ho, senior research fellow and director at Korea Institute for National Unification. “Kim Jong Un is taking advantage of the domestic North Korean celebrations of Kim Il Sung to aggressively influence South Korean elections.”

Polls show President Lee Myung Bak’s party may lose control of parliament to an opposition coalition that has pledged to improve ties with its northern neighbor. Opposition lawmakers accused the government of using the intelligence report to influence the elections.

Photographer: Pedro Ugarte/AFP/Getty Images

The North Korean rocket Unha-3 rocket is pictured at the Tongchang-ri space center. South Korea, Japan and China expressed concern over North Korea’s plan to launch a rocket between April 12 and April 16. Close

The North Korean rocket Unha-3 rocket is pictured at the Tongchang-ri space center.... Read More

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Photographer: Pedro Ugarte/AFP/Getty Images

The North Korean rocket Unha-3 rocket is pictured at the Tongchang-ri space center. South Korea, Japan and China expressed concern over North Korea’s plan to launch a rocket between April 12 and April 16.

Satellite Photos

North Korea’s ruling Workers’ Party also meets tomorrow, and may appoint Kim Jong Un the new party chief in one of the final steps marking his succession after the death on Dec. 17 of his father, Kim Jong Il.

South Korea and the U.S. are using their joint surveillance system to “closely monitor” the activity, Joint Chiefs of Staff spokesman Lee Bung Woo told reporters yesterday.

“We continue to monitor the possible launch, and we do believe they have taken additional steps toward a possible launch” since April 5, George Little, a U.S. Defense Department spokesman, told reporters at the Pentagon.

The Obama administration has said firing the long-range rocket would breach a February agreement to halt nuclear and missile tests and end uranium enrichment at its facility in Yongbyon in exchange for 240,000 tons of food aid. Kim’s government, which says putting a “peaceful” satellite into orbit doesn’t violate the deal, is using the threat of a nuclear test as a bargaining chip to keep it from falling apart, analysts including Koh Yu Hwan said.

‘Provocative Act’

A missile launch would be a “very provocative act” that would show North Korea’s leaders aren’t serious about meeting international obligations, President Barack Obama’s spokesman said.

The U.S. is working with other nations, especially China, to keep up pressure on North Korea, White House press secretary Jay Carney said yesterday at a briefing in Washington.

Carney wouldn’t comment directly on the reports that North Korea was preparing to test a nuclear device.

“We’re not going to talk about intelligence assessments, but any action toward an underground test would be a provocative action” that would again demonstrate North Korea’s disregard for its international obligations, Carney said.

Defense Shares Rise

“The likelihood of a third nuclear test depends on whether the U.S. decides to keep the Feb. 29 food aid deal following the missile launch,” said Koh, a professor of North Korean Studies at Dongguk University in Seoul. “With the nuclear preparations, North Korea is waving its nuclear card at the U.S. and telling them to make a choice.”

South Korea’s benchmark Kospi Index (KOSPI) yesterday sank 1.6 percent to its lowest close since March 7. At the same time, Victek Co. (065450), a manufacturer of electronic warfare equipment, jumped 15 percent, while military communication equipment maker Huneed Technologies also rose 15 percent.

The foreign ministers of South Korea, Japan and China expressed concern over North Korea’s launch plans, Xinhua reported after a trilateral meeting in Ningbo, China.

North Korean authorities have installed the fuselage into position at its coastal Sohae Satellite Station in the country’s northwest, and the launch appears to be on schedule, according to the intelligence report.

UN Sanctions

“While it seems possible that North Korea may conduct a nuclear test after the missile launch like it did in 2009, we will need to wait until liftoff takes place to see how the situation progresses,” South Korean Defense Ministry spokesman Kim Min Seok told reporters yesterday in Seoul.

Following the 2009 test, the United Nations Security Council passed a resolution condemning the move and strengthening sanctions that include allowing cargo suspected of containing weapons to be inspected. It also ordered the regime to admit inspectors from the International Atomic Energy Agency, something North Korea agreed to in February.

In November 2010, North Korea showed its Yongbyon facility to visiting U.S. scientists including Stanford University’s Siegfried S. Hecker, who said he saw more than 1,000 centrifuges. While North Korea claims its nuclear facility is intended to generate electricity, it can be easily converted to produce highly enriched uranium for bombs, Hecker wrote in a report on the university’s website after his North Korea trip.

South Korea’s main opposition Democratic United Party said intelligence officials may have leaked the information about the nuclear test preparations to influence the parliamentary elections.

‘Questionable’ Report

“It is questionable as to why the intelligence service is pointing this out to the people and the press now,” Park Yong Jin, spokesman of the DUP, said in an e-mailed statement.

The DUP, which calls for greater engagement with the North and has yet to issue its position on the satellite plan, is fatally “weak on national security” at a time when threats of a third nuclear test loom, ruling National Frontier Party spokesman Jeon Kwang Sam said in an e-mailed statement.

According to a Realmeter poll taken March 26-30 before campaign restrictions on polling went into effect, 39.8 percent of voters back the NFP, compared with 30.5 percent for the main opposition DUP and 8.1 percent for its coalition partner, the United Progressive Party.

To contact the reporter on this story: Sangwon Yoon in Seoul at syoon32@bloomberg.net

To contact the editor responsible for this story: John Brinsley at jbrinsley@bloomberg.net

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