The good news is that it takes much more than 1kg of enriched uranium to make a nuclear weapon. The bad news is that some was on the market at all. There is also a bit of conflicting reporting so far (see below). From the Chosun Ilbo:

Chinese police last month arrested two men on charges of trying to sell 1 kg of enriched uranium. . . The two were ethnic Koreans living in China. . . identified as Chang and Chung, on charges of attempting to sell 969.03 grams of enriched uranium at a hotel there on Sept. 11.

Beijing police said initial investigations found the enriched uranium probably came from Russia, but sources there say the possibility that it came from North Korea can’t be ruled out. One source said a considerable number of ethnic Koreans in China are involved in smuggling with North Korea. “I actually met someone in a Chinese border town who asked me to find a buyer for the material and told me, ‘I have enriched uranium smuggled from North Korea.’”

Uranium naturally occurs in two isotopes: U-238 (99.3 percent), and U-235 (0.7 percent). When the latter is enriched at 3-4 percent purity, it can be used for nuclear power plants, and with more than 90 percent purity, it becomes a raw material for nuclear weapons. It is not known at what purity the seized uranium was enriched. Some 15-17 kg are needed to produce nuclear weapons, but the seized amount was less than 1 kg. When U.S. envoy James Kelly visited Pyongyang in 2002, the North allegedly admitted to having its own highly enriched uranium program.

Summarizing Korean language news, Robert writes:

. . .Chinese media report that two ethnic Koreans (i.e., joseonjok) from China were busted in a Hotel in Beijing last month for trying to sell a reactor control rod containing uranium 235.

Two important points here; a) reactor rod, and b) U-235. If it was a reactor rod with U-235 from North Korea, it would not be anywhere near nuclear weapons grade – GMR (the type of reactors that North Korea has) use rods with naturally occurring U-235 at about 0.7 percent, which is not even considered slightly enriched (0.9-2.0 percent). Note that U-238 is not suitable for nuclear weapons (but does become plutonium in GMR).

The Chosun Ilbo story says it was “enriched uranium,” which, if it was in fuel rod form, would mean it would likely be from LWR and at 2-4 percent, which North Korea does not have. Unless this is domestically produced enriched U-235, although I doubt it would be in fuel rod form if it was.

With what is currently known; dirty bomb yes, but nuke no.

Right now the information is a bit jumbled on this – further analysis once more details are available. Until then, some background on the DPRK nuclear program, reactors, etc.