In a significant move towards industrial collaboration, Pakistan and Russia have agreed to form a working group to advance the proposal for establishing a new steel mill in Karachi. This decision emerged during a meeting between Russia’s Deputy Minister for Industry and Trade, Aleksei Gruzdev, and Pakistan’s Federal Minister for Industries and Production, Rana Tanveer Hussain.
Minister Hussain noted discussions focused on enhancing cooperation, with the Pakistani government actively considering the steel mill project in partnership with Russia. He revealed that 700 acres of land at Pakistan Steel Mills (PSM) have been allocated for this venture.
Despite having substantial iron ore reserves estimated at 1.887 billion tons, Pakistan currently faces a significant challenge, importing around $2.7 billion worth of iron and steel annually. Hussain highlighted a persistent gap between domestic production and demand, which was estimated at 3.1 million tons last year. Additionally, he pointed out that per capita steel consumption in Pakistan lags behind that of other developing countries, indicating considerable growth potential.
The proposed site near Karachi, in proximity to Port Qasim, is expected to lower transportation costs for raw materials. In a broader context, agricultural and industrial experts from Pakistan are scheduled to visit Russia, which is poised to strengthen bilateral relations.
During the discussions, both parties emphasized the importance of balanced trade. Hussain advocated for modern agricultural machinery to enhance crop yields, while Gruzdev assured that Russia would supply such machinery to bolster Pakistan’s agricultural productivity.
The meeting included key representatives, such as Denis Nevzorov, Deputy Trade Representative of the Russian Federation in Pakistan, and various secretaries from Pakistan’s Ministries of Industries, Production, and National Food Security.
A recent report from the Ministry of Industries and Production indicated that formal discussions regarding the restoration of PSM have not yet commenced. However, following a meeting between President Asif Ali Zardari and Russian officials in April 2024, where assistance for PSM was offered, the proposal for the new steel mill is gaining traction. This builds upon a memorandum of understanding (MoU) signed in 2003 aimed at reviving and expanding PSM, alongside an additional MoU in 2013 requesting a $1 million credit facility from Russia.
