Russian Railways makes first coal shipment to North Korean port

A joint venture between Russian Railways and the North Korean Ministry of Railways resulted in rebuilding a North Korean port in a rare case of foreign involvement in the economy of the isolated dictator state.

Image credit: Flickr User: Raymond Cunningham
Image credit: Flickr User: Raymond Cunningham

According to the article on The Moscow Times, the joint venture, RasonKonTrans, where Russia holds 70%, has rebuilt one of the port’s wharfs and a rail link connecting it to Russia, with the sole purpose of reliving the congestion at Russia’s Pacific ports.

The state-owned railway operator said it had already started delivering Siberian coal to the port of Rajin.

“The company has started to provide a full suite of services to ship coal through Rajin to Asia-Pacific countries,” read a statement from Russian Railways logistics subsidiary, RZhD Logistika.

Nadezhda Malysheva, Chief Editor of port industry portal PortNews, said that global mining and metals company Mechel was the sender of the coal consignments.

Russian Railways chief Vladimir Yakunin traveled to Rajin for the grand opening of the rail service and the wharf in September, in which the company invested 9 billion rubles ($250 million).  Russian engineers supervised the work, while Koreans largely contributed with unskilled labour.

The Russian terminal at Rajin, Asia’s most northerly ice-free port, will at first handle just coal freight from Russia to ship it further to China’s eastern and south-eastern provinces, and will later be equipped to be able to provide container services.

According to the statement issued by RZhD Logistika, the company loaded a total of 9,000 metric tonnes of coal on two freight trains of 130 cars each to carry to Rajin at the end of last month. The cargo will then be shipped to China’s ports of Shanghai, Lianyungang and Guangzhou.

Current load capacity of port Rajin is 4 million tonnes of coal per year.

Vostochny, Russia’s biggest coal export port, located on the Pacific coast, has the capacity to handle 18 million tonnes a year, Ms Malysheva said. According to her, the Vostochny port and the other key coal port of Vanino operate at the top of their capacity, as exports of the fuel to Asia have increased.

Coal remains the primary fuel for producing electricity at power plants in China. However, its coal price dropped 10% last year because of strong competition from Russian and Australian suppliers, the RZhD Logistika statement said.

Despite that, the Government backed a plan to boost development of the coal-mining industry in the country’s Far East to cater to Asian markets. The idea is to have a shorter transportation leg for the shipments, compared with the distance that the coal travels from Siberia.

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