Chinese steel giant threatens to exit Pakistan over unresolved issues

ISLAMABAD: Century Steel Group, a major Chinese investor, has issued a final warning to shut down its operations and pull out its investment from Pakistan if the government fails to address its grievances.

In a letter to Prime Minister Shehbaz Sharif, the company’s CEO, Li Chunjian, expressed frustration over prolonged delays and unresolved issues at the Rashakai Special Economic Zone (RSEZ) in Khyber Pakhtunkhwa, according to a report published in The News.

The group stated it would begin dismantling its plant and report the matter to the Chinese government and international media if immediate action is not taken.

Century Steel Group arrived in Pakistan with plans to establish the country’s largest steel mill in three phases. The first phase, worth $30 million out of a total $82 million investment, was underway, targeting an annual production of 500,000 tonnes of steel.

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The letter also pointed out inadequate security protocols, restrictions on personnel movement, and difficulties with local banks, which have refused to facilitate approved State Bank policies, according to the publication.

A senior government official confirmed that Prime Minister Sharif has formed a high-level committee, led by Federal Minister Abdul Aleem Khan, to address the company’s grievances. Members from both federal and KP governments are part of the committee.

The company stated it has already incurred losses of $7.5 million over five years while waiting for solutions. It criticized the lack of focus on the success of special economic zones under the China-Pakistan Economic Corridor (CPEC).

If Century Steel Group exits, it would not only hinder CPEC’s progress but also discourage other potential investors.

The company requested an urgent meeting with the prime minister to discuss the issues and seek immediate solutions.