The Pakistan Steel Mills, once a backbone of the country’s industrial sector, is poised for a comeback under a Russian-funded revival plan, with both nations expected to sign a key Engineering, Procurement and Construction (EPC) agreement in September 2025.
The revival effort follows a formal protocol signed between Pakistan and Russia in July, laying the groundwork for broader collaboration.
Officials from the Ministry of Industries and Production have said a feasibility study financed and prepared by a Russian company is underway, and scheduled for completion by Sept. 15. The study would determine whether the mill should be restored using traditional blast furnace technology or an alternative method.
The feasibility is examining two possibilities: building a new blast furnace at an estimated cost of $1 billion, or recovering frozen pig iron from the existing, non-operational furnace, a process that could cost around $400 million. Officials said if the current furnace is deemed repairable, the less expensive pig iron extraction option would be pursued. If not, new infrastructure would be installed.
Russia has not only proposed to handle the EPC contract but has also offered to support the project financially. However, Pakistani officials noted that Islamabad would still be required to contribute a portion of the investment.
The government has already earmarked 700 acres of land for the reestablishment of the plant. Full restoration would take around one year. Once operational, the steel mill could significantly reduce Pakistan’s reliance on imported steel—currently costing $3.5-4 billion annually—potentially saving the country up to $4 billion in foreign exchange.