News today that Seoul has informed Moscow that the project to ship Russian coal through Rajin port, in the DPRK’s far Northeast, to South Korea is dead, for now. Rajin is the main port in Rason, the North’s oldest SEZ. Russia had ensured the final language in last week's UN Resolution sanctioning North Korea would not invalidate the project.
The Russian Railways (in a JV withthe DPRK Railways Ministry) had refurbished a pier in Rason and the rail line to Khasan, in Russia. Three pilot runs of coal to South Korea had taken place and a South Korean consortium comprising steelmaker POSCO, Hyundai Merchant Marine Company and Korail Corporation was looking for investment. By most accounts, it was looking likely that towards end of 2015 the South Korean government was planning to make an exception to allow some kind of investment into the project. (This would require an exemption from the May 24th Sanctions that have banned southern investment in the DPRK since 2010.)
Meanwhile, a similar consortium of POSCO and Hyundai Merchant Marine have a logistics and distribution center in the city of Hunchun (across from Rason, in China). Plans to expand it are very much dependent on whether Rason becomes the hub that it has long promised to be, linking the Tumen Triangle together. It really could be a win-win-win for both Koreas and the Russian Far East, all standing to gain from cooperation.
This is unfortunate, not only for Russia, which has invested some $30 million in the project. It is a shame because Rason holds so much potential and significant progress was being made from 2010 to 2013, in particular. Since then, the geopolitics of the region have gotten difficult and things have slowed down.
Still, the Russians signed a 49 year lease on the pier they refurbished, so there is still time for things to improve.
Choson Exchange, with Hanns Seidel Foundation, conducted workshops in Rason in 2014 and 2015. There are plans for another in 2016, though given the currently difficult environment, this may sadly have to be delayed. If you're interested in visiting the DPRK to conduct a workshop in Rason or elsewhere, please click here: