Russia is expected to finalise an agreement with Pakistan this summer to construct a new steel mill in Karachi, marking a significant step in reviving the country’s industrial capacity. The development was publicly confirmed for the first time by Russian Consul-General Andrey V. Fedorov during an interview on Monday.
The planned project signals a potential revival of Russian-Pakistani industrial cooperation. The Soviet Union had originally built Pakistan Steel Mills (PSM) in the 1970s, a major symbol of national self-reliance. However, the mill has remained inactive since 2015 due to chronic mismanagement, political interference, and severe financial losses. As of the end of FY 2024, PSM had accumulated losses of Rs255.8 billion ($902 million), with liabilities rising to Rs359.9 billion ($1.27 billion). Despite its non-operational status, it still employs over 3,500 workers.
According to Fedorov, both countries are actively engaged in technical and diplomatic consultations. Russian experts have already inspected the proposed site in Karachi, and another technical team is expected soon to advance the planning process and help draft a detailed construction roadmap.
“The last negotiations were on May 27, so we are working on the final agreement,” Fedorov said. “We are ready to prepare a roadmap for the construction of a new steel mill in Karachi.”
Although he did not specify when construction would begin, he confirmed that a summer agreement is under active consideration. “They were discussing summer, you know, we are in the beginning of summer, so I hope this summer they would come … We would see in the nearest time some positive conclusions and we will reach some agreements,” he said.
While details of the investment volume were not disclosed, Fedorov emphasized that both sides are working toward mutually beneficial contracts. “Practically, a new factory must be erected. Now we should, on the level of experts, discuss that,” he added.
The new initiative could be a game-changer for Pakistan’s struggling industrial sector, offering a fresh start for one of its most iconic state enterprises.
