Three-way trade project set to go with North’s OK

A three-party trade project involving both Koreas and Russia, that on the surface comes off as improbable, is now in the final stages of approval by Pyongyang, according to a source involved in the enterprise.

Once approved, three South Korean companies will import 150,000 tons of Russian coal through the port city of Rajin, North Korea, in what has been referred to as the Rajin-Khasan logistics project.

The source noted on Tuesday that the project will proceed as planned once Pyongyang approves the shipment of 150,000 tons of coal from the northeast city of Rajin to Pohang, North Gyeongsang. The expected shipment will be used for thermal power generators and iron making.

Under the envisioned project, coal will first be transported to Rajin from the Russian border city of Khasan on a reconnected 54-kilometer (33-mile) railway before being shipped to South Korea.

The three South Korean companies involved in the project are top steelmaker Posco, the Korea Railroad Corporation (Korail) and ship maker Hyundai Merchant Marine Co. Officials from the three have already visited the North Korean city for the coal’s transport.

According to the source, the shipment will be carried out sometime in late April or early next month once the North gives the project the green light. It will mark the second shipment spanning those three countries: South Korea imported 40,000 tons of coal last November transported via the same route.

The consignment through Rajin and Khasan is part of efforts to carry out President Park Geun-hye’s so-called Eurasia Initiative, a plan intended to boost the regional economy through free trade and economic cooperation in the Eurasian bloc by reconnecting the railways that link both Koreas, China and Russia.

When asked whether the North was delaying its approval of the coal shipment due to ongoing joint military exercises between Seoul and Washington - which the regime denounces as an act of war - a government official said it wasn’t entirely accurate to say the issue was related to the annual drills.

The source added that the government expects Pyongyang’s approval in the coming days.

Since the South imposed sanctions on Pyongyang in retaliation for the North’s sinking of the ROK Cheonan warship in 2010, all inter-Korean economic cooperation has been suspended, with the exception of the joint Kaesong Industrial Complex.

The three-way trade project, if launched as planned, is expected to help ease long-stalled inter-Korea relations. Since President Park took office in 2012, there has yet to be a breakthrough.

BY KANG JIN-KYU [kang.jinkyu@joongang.co.kr]