Page last updated at 14:12 GMT, Thursday, 8 April 2010 15:12 UK

North Korea 'freezes Kumgang resort assets'

Poster advertising Mount Kumgang resort (file)
North Korea says it will use another partner to run the resort

North Korea says it will freeze South Korean assets at the Mount Kumgang tourism project and restart the venture with a new partner.

In a statement, the communist country said it would also expel South Korean personnel working at the site.

The resort is a key source of foreign revenue for the North, which has been angered by a South Korean ban on tours.

Seoul banned the cross-border visits after a South Korean tourist was shot and killed.

Housewife Park Wang-ja, 53, was killed by North Korean guards on 11 July 2008 on a beach near the resort.

South Korea says it wants the killing - when the tourist allegedly strayed into a military area - properly investigated before it allows tours to resume.

Last month, North Korea threatened to take "extraordinary measures" unless the South lifted its ban.


In the latest statement carried by its official news agency KCNA, it said it had scrapped the tourism deal and was freezing some assets owned by the South at the resort.

"Enormous are economic losses suffered by us due to the long suspension of the tour, and the confiscation of all real estate and facilities of the South side in the tourist zone would not be enough to compensate for them," KCNA quoted an official as saying.

A new partner would take over the tours, North Korea said, without specifying who that partner was. The tours used to be run by South Korean firm Hyundai Asan.

North Korea also said that it would "entirely re-evaluate" the joint industrial park at Kaesong.

Relations between the two Koreas have worsened in the last two years under South Korean President Lee Myung-bak.

He wants to see progress in talks aimed at ending North Korea's nuclear ambitions and has curtailed the large-scale aid projects of his predecessor Roh Moo-hyun.

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