ISLAMABAD — July 12, 2025: In a major development aimed at reviving Pakistan’s industrial backbone, Pakistan and Russia have signed a landmark agreement to restore and expand the long-dormant Pakistan Steel Mills (PSM), once considered the pride of the nation’s manufacturing sector.
The deal was formalized at the Pakistan Embassy in Moscow, with Secretary for Industries and Production Saif Anjum and Vadim Velichko, General Director of Russia’s Industries Engineering LLC, signing the agreement. The signing ceremony was attended by Special Assistant to the Prime Minister Haroon Akhtar Khan and Pakistan’s Ambassador to Russia, Muhammad Khalid Jamali.
Built with Russian support over five decades ago in Karachi, the PSM had been non-operational since 2015, its aging infrastructure and chronic losses turning it into a burden on the national exchequer. Efforts to privatize the facility repeatedly fell through, and its future remained uncertain — until now.
Speaking at the ceremony, Haroon Akhtar Khan emphasized the symbolic and strategic value of the agreement. “This initiative not only reflects our shared industrial history with Russia but also underscores a joint commitment to rebuilding Pakistan’s steel sector on modern lines,” he said.
As part of the broader understanding between Islamabad and Moscow, both sides have also agreed to establish entirely new steel mills in Karachi — a project expected to further bolster bilateral industrial cooperation.
The proposal for new mills emerged during discussions between Russian representative Denis Nazaroof and Haroon Akhtar Khan. A high-level Pakistani delegation, including Special Assistant on Foreign Affairs Tariq Fatemi and Mr. Khan — who also serves as the focal person for the PSM revival — met with Russian Deputy Prime Minister Alexei Overchuk earlier this week in Moscow.
According to insiders, Pakistan has placed high strategic importance on restoring the steel plant, not only to reinvigorate domestic production but also to re-establish industrial collaboration with a longstanding ally.
The Sindh government initially approached Russia last year, seeking assistance to breathe new life into the defunct plant, which was officially closed in 2024 after years of decline. Although the facility was once on the radar for global privatization, it is no longer part of the government’s privatization roadmap for the 2024–2029 period.
The Pakistan Steel Mills remains the largest industrial complex in the country, with a potential capacity ranging between 1.1 and 5 million tonnes of steel and iron output annually. Reviving this industrial giant, officials say, could serve as a cornerstone for national economic growth and a renewed era of Pakistan-Russia cooperation.
