Pakistan, Russia agree to establish new steel mills in Karachi
ISLAMABAD: In a bid to boost-up bilateral relations Russia and Pakistan have agreed to establish a new steel mill in Karachi.
The development came here during a follow up meeting between Special Assistant to the Prime Minister (SAPM) on Industries and Production Haroon Akhtar Khan and a Russian delegation led by Denis Nazaroof, a visiting representative of Russia. The Russian official assured Pakistan of his country's commitment to build a steel mill in Karachi, also inviting Pakistan to participate in an exhibition being organized by the Russian Ministry of Industry in Moscow.
The Russian delegation informed the SAPM that a meeting on the same subject was held in September 2024, between Russia's Deputy Minister for Industry and Trade Aleksei Gruzdev with than Federal Minister for Industries and Production Rana Tanveer Hussain. At that time both the parties agreed to constitute a working group to move forward on a proposal of establishing a new steel mill in Karachi.
New steel mills in Karachi: Pakistan, Russia agree to constitute working group
The primary focus of the discussion was the establishment of new steel mills in Pakistan and both parties engaged in extensive talks on the potential collaboration between Pakistan and Russia in setting up a new steel mill in Karachi. The two countries agreed to form a joint working group to facilitate the development and implementation of this initiative. Akhtar Khan emphasised the prime minister's vision to increase investments in Pakistan.
He highlighted that this is an opportune time for foreign investors to invest in the country, noting that Pakistan has evolved as a strong and safe destination for international investment and business.
Furthermore, Khan underscored the potential for a remarkable collaboration between Pakistan and Russia in the steel industry, which could prove beneficial for both nations.
'Pakistan is a secure and thriving hub for investment, and the international community has recognised its potential,' said Khan. He also extended an invitation to all Russian businesspeople to explore investment opportunities in Pakistan. The meeting also marked an important step in further strengthening the ties between the two nations and opening new avenues for joint ventures in key sectors such as steel production.
Pakistan has informed the Russian official that the government of Pakistan has earmarked 700 acres land of Pakistan Steel Mills (PSM) for establishing a new steel mill.
He said despite being blessed with considerable reserves of iron ore with an estimated reserves of 1.887 billion tons, Pakistan is forced to import around $2.7 billion of iron and steel annually. There is a perpetual gap between domestic production and demand of iron and steel. For the last year, the gap is estimated at 3.1 million tons, Hussain added.
Pakistan's per capita steel consumption level is below even those of developing countries indicating significant growth potential over medium and long term. He said efficiency of Pakistan's steel industry is limited as it is segmented (600 small units) and based on old inefficient technology.
The proposed site is located at Karachi and is close to Port Qasim that reduces cost of transportation of raw materials. Pakistan's industrial and agricultural experts are set to visit Russia, marking a significant step in strengthening bilateral ties between the two nations.
According to a recent report of the Ministry of Industries and Production submitted to the National Assembly, Pakistan has not yet entered into formal discussions about restoring PSM. However, following a meeting between President Asif Ali Zardari and Russian officials on April 4, 2024, where Russia offered assistance for PSM, Pakistan is also considering establishing a new steel mill.
The report highlighted that a memorandum of understanding (MoU) signed in 2003 between Pakistan and Russia aimed to revive and expand PSM, leading to an agreement with Tyazhprom export Russia. This company helps foreign countries with the design, construction, and modernisation of metallurgical plants and related enterprises. Another MoU in 2013 involved a request for a $1 million credit facility from Russia.
Copyright Business Recorder, 2025
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