In a major boost to its industrial and defence capabilities, Pakistan has secured Russian support to restore and modernise the iconic Pakistan Steel Mills (PSM) in Karachi.
The move marks a new phase of bilateral economic cooperation between Moscow and Islamabad, according to Pakistan’s Ambassador to Russia, Muhammad Khalid Jamali.
A key agreement has been signed between the two nations to revive and expand the state-run PSM, originally built in the 1970s with Soviet assistance.
After extended negotiations, both countries agreed in May to restore the now-defunct steel plant, underlining deepening industrial collaboration between Russia and Pakistan.
The steel mill, which was built on a 19,000-acre site in the port city of Karachi, was once the largest industrial complex in Pakistan. At its peak, it produced up to three million tonnes of steel annually and employed over 30,000 people.
Operations ceased in 2015 due to sustained losses, and since then, Islamabad has sought foreign partners—particularly Russia—to help rebuild the plant and its outdated infrastructure.
The new protocol was signed at Pakistan’s Embassy in Moscow by Secretary of Industries and Production, Saif Anjum, and Vadim Velichko, General Director of Russia’s Industries Engineering, LLC. Special Assistant to the Prime Minister Haroon Akhtar Khan and Ambassador Jamali also attended the ceremony.
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“Reviving Pakistan Steel Mills with Russia’s support reflects our shared history and commitment to a stronger industrial future,” said Haroon Akhtar Khan.
The project aims to restart and expand steel production while setting the stage for further strategic cooperation. According to the Pakistani mission in Moscow, it is expected to significantly benefit Pakistan’s industrial output and defence preparedness.
Reports indicate that China was also in the running to secure the contract, but Islamabad ultimately chose Moscow due to Russia’s historical role in the creation of the steel mills during the Soviet era.
The revival of PSM in Karachi—Pakistan’s economic hub—has been widely welcomed. The re-launch is expected to generate thousands of skilled jobs and meet the steel demands of a growing national economy.
In addition, Russia and Pakistan have agreed to establish new steel production facilities in the Karachi area. Given the strategic importance of steel to national defence and infrastructure, the decision is likely to raise concerns among Pakistan’s arch adversary India.
