Pakistan, Russia to set up new steel mill in Karachi

Pakistan and Russia have agreed to form a joint working group to move forward on a proposal to establish a new steel mill in Karachi. The decision was reached during a meeting between Pakistan’s Federal Minister for Industries and Production, Rana Tanveer Hussain, and Russia’s Deputy Minister for Industry and Trade, Aleksei Gruzdev.

The proposed steel mill will be built on 700 acres of land at Pakistan Steel Mills (PSM) in Karachi, which is close to Port Qasim, reducing the cost of transporting raw materials. Pakistan is facing a significant gap between domestic production and demand of iron and steel, with an estimated annual shortfall of 3.1 million tonnes. Despite the fact that the country has considerable reserves of iron ore with estimated reserves of 1.887 billion tonnes, Pakistan imports $2.7 billion worth of iron and steel annually However, Hussain said the country’s per capita steel consumption is also low, indicating significant growth potential in the medium to long term.

Gruzdev expressed Russia’s willingness to provide modern agricultural machinery to Pakistan to boost crop yields and enhance agricultural productivity. Hussain emphasized the need for efficient and modern technology in the steel industry, which is currently segmented and based on old technology.

The meeting also highlighted the importance of balancing trade between the two countries. Pakistan’s industrial and agricultural experts will visit Russia in the coming months to further strengthen bilateral ties.

The proposed project has been in the works since 2003, when a memorandum of understanding (MoU) was signed between Pakistan and Russia to revive and expand PSM. In 2013, another MoU was signed, which included a request for a $1 million credit facility from Russia.