Pakistan and Russia have agreed to establish a new steel mill in Karachi [1], marking a significant step in strengthening bilateral ties and expanding industrial collaboration. The agreement was finalized during a meeting between Russian representative Denis Nazaroof and Special Assistant to the Prime Minister (SAPM) Haroon Akhtar Khan, where both sides engaged in extensive discussions on the project.
The initiative reflects the broader deepening of Pakistan-Russia relations, which have seen increased cooperation in energy, including oil and gas supplies. In 2023, the two countries worked on a deal for Russian crude deliveries to Pakistan, and discussions have continued on broader energy partnerships. Additionally, they are collaborating on the Pakistan Stream Gas Pipeline, a major infrastructure project aimed at transporting imported gas from Karachi to Punjab to address Pakistan’s energy needs.
The new steel mill project echoes the historic collaboration between Pakistan and the Soviet Union in the 1970s, when the latter helped establish Pakistan Steel Mills (PSM). Once the country’s largest industrial complex, PSM suffered decades of neglect, financial mismanagement, and political interference, ultimately ceasing production in 2015 after accumulating billions in losses.
During the meeting, Khan emphasized Pakistan’s attractiveness as an investment destination, stating that the country is a secure and thriving hub for international business. He invited Russian investors to explore opportunities in Pakistan’s steel sector, highlighting the Prime Minister’s vision to attract foreign investment and foster meaningful cooperation between the two nations.
The agreement also includes plans to form a joint working group to oversee the development and implementation of the steel mill project. Pakistan has earmarked 700 acres of land from the defunct Pakistan Steel Mills for the new facility, aiming to bridge the gap between domestic steel production and demand. Despite possessing 1.887 billion tons of iron ore reserves, Pakistan imports approximately $2.7 billion worth of iron and steel annually, underscoring the need for increased domestic production.
Industry experts view the project as a strategic move to revitalize Pakistan’s steel industry, enhance industrial capacity, and strengthen economic ties with Russia. The collaboration is expected to bring technological advancements and investment into Pakistan’s steel sector, potentially improving efficiency and reducing reliance on imports.
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[1] Pakistan and Russia agree to establish new steel mill in Karachi https://www.arabnews.com/node/2600654/pakistan