South Korea's POSCO and Hyundai Merchant Marine Co. will commence the pilot run of their project to import Russian coal via a route that passes a North Korean railway next week, industry sources said Thursday, marking a rare example of economic cooperation with the North amid economic sanctions.

Under the Rajin-Khasan project, No. 1 steelmaker POSCO will import coal from Russia's Primorsky Krai, which borders with North Korea, by using a 54-kilometer railway that connects to the North's port city of Rajin, where the cargo will again be loaded to vessels that will sail to Pohang, a southeastern port city of South Korea.

The South Korean consortium of POSCO, Hyundai Merchant Marine, and Korea Railroad Corp. plans to start the pilot run by importing 35,000 tons of Russian coal with a 50,000-ton vessel that will leave Rajin on Nov. 29. 

North Korea and Russia hold 30 percent and 70 percent, respectively, in the Rajin-Khasan project. As South Korean firms cannot directly forge business ties with the North under economic sanctions, the three companies instead hold half of the Russian shares.

Seoul imposed sanctions, known as the May 24th measures, against Pyongyang in 2010 for its deadly attack on a South Korean warship that left 46 sailors dead, suspending almost all inter-Korean economic projects. The government, however, approved the consortium's indirect investment.

POSCO already imports some 2 million tons of coal from Russia annually, most of which is shipped from Vladivostok. The company tapped the Rajin-Khasan project in order to cut shipping costs. (Yonhap)