A new 54km cross-border freight railway line linking the Russian town of Khasan and the North Korean port city of Rajin has been opened for faster cargo shipments between Asia and Europe.

The new line, which carries 100,000 freight containers per year, will initially be used for supplying coal from Russia to markets in the Asia-Pacific region, with plans to build a container-handling plant and an oil terminal in the second phase.

OAO Russian Railways CEO Vladimir Yakunin was quoted by Bloomberg as saying: "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 added that the freight terminal at Rajin will be able to handle four million tonnes of coal, including shipments for OAO Mechel per year.

The new line, which is part of a bigger project called the Iron Silk Road, is expected to encourage the economic and transport development of the two nations.

At a summit in 2001, North Korea’s late leader Kim Jong-Il and Russian President Vladimir Putin agreed to restore the rail link, as part of a joint project that included a container terminal in Rajin.

Both the leaders had agreed to reinstate the railway line in 2001 and work on the project began in 2008.