The 'dishonorable discharge' means expulsion from the Workers Party, but at least worn out soldiers get to go home.
Political prisoners and citizens of low social standing are sent to work in the mines under harsh conditions, report says.
Clothing must not bear labels showing manufacture in rival South Korea, though.
Judicial authorities will not allow them to work in outside business ventures unless they fulfill their work obligations to the state.
Soldiers from less well-off families meanwhile serve at dangerous posts or in construction brigades.
Many are exhausted from working without compensation to show their commitment to the repressive regime.
UN sanctions are helping push vacancy rates up in Dadong, China as business with North Korea slows.
They are avoiding patronizing them so as to not attract additional attention from North Korean monitors who track their moves.