Posted on : Oct.26,2018 17:04 KST Modified on : Oct.26,2018 17:16 KST

High1 ChooChoo Park in Samcheok, Gangwon Province, was a train-themed resort erected as an alternative industry for the region’s mining industry, but after suffering losses almost immediately after its open, the theme park shut down in October 2014.

Mining communities face economic collapse and shrinking population in spite of US$ 3 bln of investment over 20 years 

Residents of regions suffering mine shutdowns and economic collapse in the wake of 1989 coal industry rationalization measures have battled to demand guarantees on their survival rights. In 1995, the South Korean government established the Special Act on the Assistance to the Development of Abandoned Mine Areas. It was on the basis of this law that Kangwon Land – a developer of casino resorts accessible to South Korean nationals – was established in 2000.

Following the Special Act’s establishment, some 3.0501 trillion won (US$2.69 billion) in public funds was invested in fostering replacement industries in Gangwon Province’s former mining regions over the 20 years from 1997 to 2017. The amount includes a 1.1246 trillion won (US$992 million) abandoned mine fund amounting to 25 percent of profits from the Kangwon Land casino; 711.3 billion won (US$627 million) in mining region development project spending; and 540.3 billion won (US$476 million) in former mining region promotion spending.

But the replacement industries that arrived in former mining regions – including O2 Resort in Taebaek (440.3 billion won/US$338 million), Donggang Cistar in Yeongwol (153.8 billion won/US$136 million), and High1 ChooChoo Park in Samcheok (75.3 billion won/US$66 million) – are all seen as failures.

High1 ChooChoo Park in Samcheok, Gangwon Province, was a train-themed resort erected as an alternative industry for the region’s mining industry, but after suffering losses almost immediately after its open, the theme park shut down in October 2014.

O2 Resort was sold to a private company after going into court receivership due to mounting losses. Donggang Cistar has also entered a workout program because of continued losses. ChooChoo Park struggled with red ink as soon as it opened and is currently fighting for its survival with an additional 8.4 billion won (US$7.4 million) investment from parent company Kangwon Land in April. The Kangwon Land resort in Jeongseon, which has a casino, is the only one currently enjoying good business.

With even the alternative industries imperiled, the former mining regions are facing potential ruin. According to Research Institute for Gangwon (RIG) data, four former mining communities in the province had a combined 2016 population of 195,460 – down 55.7 percent from 440,000 in 1988, the year before the coal industry rationalization measures. The communities have suffered a population hemorrhage five times the 10.4 percent drop in Gangwon’s total population from 1.73 million to 1.55 million over the same period.

The number of employed people rose by an average of one percent per year for the province as a whole, but just one percent for the former mining communities. Not only has resident quality of life not risen after all the fattening of developers, but the regional economy is becoming more devastated by the day.

“The collapse of former mining communities isn’t something the local government can stop on its own,” said Lee Won-hak, head of RIG’s mining region development support center.

“There needs to be systematic development implemented by a dedicated organization under central government leadership,” Lee said.

By Park Soo-hyuk, Gangwon correspondent

Please direct comments or questions to [english@hani.co.kr]

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