South Korea eyes logistics project with North Korea and Russia

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Follow @SamJermy and @SupplyChainD on Twitter.In a test run of a prospective logistics project with North Korea and Russia, South Korea plans to bring i...

Follow @SamJermy and @SupplyChainD on Twitter.



In a test run of a prospective logistics project with North Korea and Russia, South Korea plans to bring in 35,000 tonnes of Russian coal through the North Korean port of Rajin next month, a government official said this week.

The test run is part of the government's push to join the Rajin-Khasan logistics project, which links the North Korean port city, located in the northern tip of the country, to Russia's Trans-Siberian Railway.

Three South Korean firms; KORAIL, POSCO and Hyundai Merchant Marine, are currently working on a consortium to join the North Korea-Russia project.

Having conducted two onsite inspections of the Rajin port and the railroad between the port and the Russian city of Khasan, the local firms are now in negotiations with the Russian side with the aim of striking a deal by the end of this year, according to government sources.

Ryoo Kihl-jae, an official at the Korean Unification Ministry said: "About 35,000 tonnes of Russian coal will be shipped to the South Korean port of Pohang in November through the Rajin port as an experimental shipment. The government plans to provide necessary support for the firms' push for the project."

Referring to the test run, the Unification Ministry also said in a meeting of the unification preparation committee: "The previous two onsite inspections and feasibility tests may lead to an experimental shipment program sometime in November."

According to other government sources, the coal to be imported through the test run will be used by POSCO to manufacture steel.

A Russian or Chinese ship, not a South or North Korean one, may be used for the pilot shipment, according to the sources.

The South Korean government has been promoting South Korean firms' participation in the logistics project, which it views as closely linked to President Park Geun-hye's "Eurasian Initiative" a vision that calls for building more infrastructure and freeing up trade between Eurasian nations to create what could become a large single market rivaling the European Union.

During their summit meeting in Seoul in November 2013, President Park and her Russian counterpart Vladimir Putin agreed to help the South Korean firms join the project, which would let them invest indirectly in the North.

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