The small town of Dikson is set to get a key role in Russia’s big Arctic plan

The tiny town of about 550 residents could become a major Northern Sea Route shipping hub.

The roughly 550 people living in Dikson, an outpost on the Kara Sea coast, could soon face big change as Russia’s federal government earlier this month decided to give the local seaport international status.

Behind the decision lies a plan to boost shipments on the Northern Sea Route, the government said. Foreign vessels will now be allowed to sail into local ports to load and unload goods.

Dikson is located on the northwestern coast of great peninsula Taymyr, near the major Taybass coal deposits owned by company Vostok Coal.

The company, controlled by powerful businessman Dmitry Bosov, intends to ship out as much as 20 million tons of coal per year from the area by 2024. Two major fields are under development and commercial production due to start in 2019, the company says.

A third major license area was obtained earlier this year.

Two major new seaports are to be built. The Chayka and Sever terminals will be able to handle combined quantities of more than 30 million tons of coal per year. Despite shrinking international demands, all of the Taybass coal is aimed at export.

The new terminals will also be able to handle coal from the Syradasayskoye field, the federal government argues. The Syradasayskoye is located further south in the peninsula. It is controlled by company Severnaya Zvezda and planned developed with the building of a 120 long new railway. The field can produce up to 10 million tons of coal per year, TASS reported.

And the future of Dikson is more than coal. It is also oil.

Company Neftegazholding intends to build a more than 400-kilometer-long pipeline from its Payakha fields to the Sever terminal. Annual shipments from site will ultimately amount to 26 million tons, the company says.

The grand development plans in Taymyr come as federal authorities is grappling with President Vladimir Putin’s order to boost annual shipments on the Northern Sea Route to 80 million tons by year 2024.

“Thanks to the development of these investment projects the increase in shipments on the Northern Sea Route will be provided,” the government decree reads.

If the ambitious targets for the Northern Sea Route are met, Russia will export more than 35 million tons of LNG from Yamal and nearby Gydan, as well as more than 20 million tons of coal and 20 million tons of oil from Taymyr by 2024.

The remote peninsula constitutes the northernmost part of mainland Russia and climatic conditions are extreme. Nature is vulnerable and industrial activities could seriously affect local ecosystems.

The plans to develop the coal resources in the area and the projected seaports have already encountered opposition from environmental authorities who argue that they could encroach on protected nature territories in the area.

With the new governmental decree, the project developers might have got the carte blanche they have been waiting for.

According to the federal government, the adopted decision provides the necessary permissions to “allocate lands, prepare documentation on territorial planning,” as well as “to build capital objects.”