Pakistan Steel Mills set for comeback under Russian-funded revival plan

In a major step toward reviving Pakistan Steel Mills (PSM), Pakistan and Russia are expected to sign an Engineering, Procurement, and Construction (EPC) agreement in September 2025.

Officials from the Ministry of Industries and Production told Nukta that a feasibility study—fully financed and prepared by a Russian company—will be completed by September 15 as part of the project's first phase. A formal protocol for the collaboration was signed between the two countries in July.

The feasibility study will assess whether to restore the steel mill using the existing blast furnace technology or to opt for an alternative method. Two options are currently under consideration: installing a new blast furnace at an estimated cost of $1 billion, or extracting frozen pig iron from the current furnace, which would cost around $400 million.

“If the current blast furnace is deemed repairable, the cheaper option of melting and removing the solidified iron blocks will be pursued,” officials said. “Otherwise, new blast furnaces will be installed.”

Russia has not only offered the EPC contract but has also shown interest in providing financial support for the project. However, Pakistan is expected to contribute a portion of the funding.

The government has already allocated 700 acres of land for the revamped plant, according to officials.

Full restoration of PSM is projected to take about a year. Once operational, the revived facility could help Pakistan save up to $4 billion annually in foreign exchange by reducing steel imports, which currently cost between $3.5 billion and $4 billion each year.