Local tourists walk on the trail at Mount Kumgang, known as Diamond Mountain. Picture: AP

Seoul - It's a mountain resort with a difference. Visitors to North Korea's Mount Kumgang can revel in the beauty of scenic valleys, waterfalls and temples just a few miles from the heavily militarized border that divides the Korean Peninsula.

At least, that's how the thinking went. Opened in 1999 and envisioned by North Korea as a destination for foreign tourists, especially South Koreans, the resort became a symbol of cross-border engagement amid often-fraught relations.

Families separated by the Korean War held reunions there. South Korean firms invested hundreds of millions of dollars in the project. But since the South pulled out in 2008, after one of its citizens was killed by a North Korean soldier, the resort has languished as a virtual ghost town.

North Korean leader Kim Jong Un has since instructed officials to remove "shabby" and "unpleasant-looking" South Korean facilities from Mount Kumgang, state media reported.

He bemoaned the "very backward" South Korean architecture that resembled "makeshift tents in a disaster-stricken area." North Korea should take the lead in developing the area according to "our own way," Kim said, while stressing that South Koreans were still welcome to visit.

Rachel Minyoung Lee, an analyst with the North Korea-focused website NK News, said the change in Kim's message indicates his regime "has decided it can no longer wait for South Korea to take action."

"North Korea is basically telling South Korea that it will remove its installations and that, if [Seoul] wants to keep its share of the investment, it should act quickly" to resume economic cooperation, she said.

South Korea would seek to "protect the property rights of our people" and was willing to discuss the Mount Kumgang operations with North Korea, said Unification Ministry spokesperson Lee Sang-min.

The flap over the resort, which is also known as Diamond Mountain, underscores the risks South Korean firms face in getting involved in ostensibly political projects with North Korea. 

While some see a prospective opening up of North Korea as a huge opportunity, many have suffered losses when relations have deteriorated in the past, and had their assets confiscated.

Hyundai Asan, a subsidiary of the Hyundai conglomerate that built and operated tourist accommodations around Mount Kumgang, said in a statement that the company was "confused" by North Korea's announcement and would respond "in a calm manner."

The Washington Post