Islamabad, July 1, 2025: Russia expects to finalize a deal with Pakistan this summer to construct a new steel mill in Karachi, according to Consul-General Andrey V. Fedorov, marking the first occasion a Russian representative has openly acknowledged the proposed initiative.
The upcoming venture would signify a renewal of Cold War-era industrial ties as Islamabad looks to secure new international investment and deepen relations with Moscow.
The Soviet Union was responsible for the establishment of the original Pakistan Steel Mills (PSM) in Karachi during the 1970s, once celebrated as the nation’s premier government-run industrial facility. Once a beacon of economic self-reliance, PSM has remained inactive since 2015 following prolonged misgovernance, political meddling, and financial setbacks.
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By the end of fiscal year 2024, the plant had incurred total losses amounting to Rs255.8 billion ($902 million), with outstanding obligations climbing to Rs359.9 billion ($1.27 billion). Despite not functioning, the plant still retains over 3,500 employees.
Currently, officials from Russia and Pakistan are engaged in both technical and diplomatic exchanges to shape the blueprint for the new steel mill. Russian engineers have already visited the potential location in Karachi, and another group is anticipated shortly to further develop plans and produce a comprehensive execution outline.
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“The last negotiations were on May 27, so we are working on the final agreement,” Fedorov mentioned in a conversation with Arab News when inquired about the new steel agreement.
Fedorov refrained from specifying when the building work would start but noted that discussions had focused on finalizing an arrangement during the summer: The diplomat did not disclose the expected investment amount from Russia but indicated that both nations are now collaborating to design “mutually beneficial contracts and agreements.”
