WASHINGTON— A senior Russian official said Russia and North Korea are expanding economic ties through a rare joint project that would overhaul the North’s railway system.
Recently, the two countries reached a deal that calls for Russia to improve North Korea’s railway network in return for access to the North’s mineral resources.
According to press reports, Moscow plans to put $25 billion into modernizing more than 3,000 kilometers of the North’s railroads over 20 years.
“The railway modernization project will be funded through the implementing of the product sharing agreement. It’s the result of our discussion with the DPRK’s party. The process of field work and mining will go hand in hand with the process of railway modernization,” said Alexander Galushka, Russia’s minister for the development of the Russian Far East, in an email sent to VOA.
Galushka said a group of Russian firms, including Mostovik, a construction company, is participating in the project. The joint venture is titled Pobeda, which means victory in Russian.
Groundbreaking
The Pobeda project began late last month with a groundbreaking ceremony for the renovation of the railway. It connects the two stations in the Jaedong coalfields in the North’s South Pyongan province and the country’s west coast port of Nampo.
North Korea is known to have vast reserves of resources, including uranium, iron ore, magnesium and other minerals, a critical source of funds for the cash-strapped country.
Some economists believe mining is helping Pyongyang improve its ailing economy.
According to Bank of Korea, South Korea’s central bank, the North’s gross domestic product grew by 1.1 percent last year.
For the rest of this article, click here: http://www.voanews.com/content/russia-to-overhaul-north-koreas-railway-in-return-for-mineral-resources/2513493.html