Islamabad, September 18, 2024 – Pakistan is set to establish a new steel mill in Karachi with cooperation from Russia, marking a significant stride in the country’s industrial development.
The plan, aimed at bolstering Pakistan’s steel production capacity, was discussed in a meeting between Deputy Minister of Industry and Trade of the Russian Federation, Alexey Gruzdev, and Pakistan’s Minister for Industries, Production, and National Food Security, Rana Tanveer Hussain.
According to a news release issued on Wednesday, the two nations have agreed to form working groups to negotiate the project’s details. The steel mill will be established on a 700-acre plot of land that the government has earmarked from Pakistan Steel Mills (PSM). This strategic initiative is expected to help close the gap between domestic steel production and demand, which has long plagued Pakistan’s economy.
Despite having abundant iron ore reserves—estimated at 1.887 billion tons—Pakistan imports approximately $2.7 billion worth of iron and steel annually. The domestic steel industry’s limited capacity to meet rising demand, paired with outdated technology, has created a production gap, which last year was estimated at 3.1 million tons.
Rana Tanveer Hussain emphasized the need for modernizing the country’s steel industry. “Pakistan’s per capita steel consumption is far below that of even other developing countries, highlighting the potential for significant growth in the medium and long term,” he stated. The country’s steel sector, comprising around 600 small units, is currently fragmented and operates with inefficient technologies. The new steel mill is expected to leverage modern processes to meet both domestic and export needs.
The mill’s proposed location in Karachi, near Port Qasim, offers logistical advantages by reducing the cost of transporting raw materials. This strategic positioning could enhance the mill’s efficiency and competitiveness in both domestic and international markets.
The meeting also emphasized the broader economic ties between Pakistan and Russia, particularly in the agricultural sector. Both nations stressed the need for balanced trade, with Pakistan seeking modern agricultural machinery from Russia to enhance crop yields and agricultural productivity.
Alexey Gruzdev assured Pakistan of Russia’s commitment to providing cutting-edge agricultural technologies and equipment. “We are eager to collaborate with Pakistan in both the steel and agriculture sectors,” Gruzdev said, highlighting the potential for deeper economic ties.
This collaboration represents a step forward in strengthening bilateral relations, as well as an opportunity for Pakistan to reduce its dependence on steel imports while boosting its agricultural output.
The meeting was attended by several key officials from both countries, including Denis Nevzorov, the Deputy Trade Representative of the Russian Federation in Pakistan, and top Pakistani industrial and agricultural experts.
