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Russia Opens North Korean Rail Link for ‘Iron Silk Road’

Sept. 22 (Bloomberg) -- Russia and North Korea opened a cross-border freight railway intended to speed cargo shipments between Asia and Europe in the event that the rival Koreas connect their train networks.

The top executives of both countries’ state train operators inaugurated a route today that links the North Korean port city of Rajin with the Russian border town of Khasan.

Initially, the 54-kilometer (33-mile) line will transport Russian coal to markets in the Asia-Pacific region, OAO Russian Railways Chief Executive Officer Vladimir Yakunin said at the ceremony in Rajin. The second phase of the project will involve the construction of a container-handling facility and potentially an oil terminal at the North Korean site, he said.

“Our common objective is for this link and port to be a pilot scheme for the restoration of a single transport system in North and South Korea that would link the peninsula to countries that gravitate to this region, to Europe via Russia,” Yakunin said. The CEO said he hopes the plan will help promote peace between the two Koreas, which remain technically at war following the conflict 1950-53 that divided the countries.

The route is part of a larger project, dubbed the Iron Silk Road, that would connect Russia’s Trans-Siberian Railway to South Korea via the North for an overland route cutting transportation costs to Europe. Success depends on improved ties between South Korea and its isolated Communist neighbor.

Reunions Scrapped

North Korea canceled plans today for reunions this week of families separated by the division of the peninsula, and accused South Korean leaders of “throwing obstacles” in the way of reconciliation.

The North also put off talks on resuming tours by South Koreans to its Mount Geumgang resort after recent weeks of improved relations between the two sides. Kim Jong Un’s regime accused the South of seeking confrontation, and threatened “strong and decisive” retaliation against any military provocation.

The Khasan-Rajin rail link will carry 100,000 freight containers a year, the North’s official Korean Central News Agency reported in April 2012.

The freight terminal at Rajin will be able to handle 4 million tons a year of coal, Yakunin said today, including shipments for OAO Mechel, Russia’s biggest supplier of the material for steelmakers.

The new rail connection “will promote the joint economic and transport development of the two countries and welfare of their peoples,” North Korean Railways Minister Chon Kil-su said.

To contact the reporter on this story: Ekaterina Shatalova in Rajin, North Korea, via eshatalova@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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