ISLAMABAD/MOSCOW: In a significant shift in regional industrial cooperation, China appears to be out of the race for reviving Pakistan Steel Mills (PSM), as Pakistan and Russia signed a pivotal protocol on Friday to restore and expand the long-defunct industrial giant.
The agreement, signed at the Pakistan Embassy in Moscow, marks a new era of Pak-Russian industrial collaboration and signals Russia’s return as a key player in Pakistan’s steel sector, decades after the Soviet Union originally helped establish the mill in Karachi in 1971.
The protocol was signed by Pakistan's Secretary for Industries Saif Anjum and Vadim Velichko, General Director of Russia’s Industrial Engineering LLC. The ceremony was witnessed by Special Assistant to the Prime Minister Haroon Akhtar Khan and Ambassador Muhammad Khalid Jamali, among other officials.
“Reviving the PSM with Russia’s support reflects our shared history and commitment to a stronger industrial future,” Khan stated, highlighting the symbolic and strategic importance of the renewed partnership.
Once a symbol of national pride and industrial prowess, PSM began to deteriorate in 2008 due to a combination of mismanagement, political appointments, and global economic downturns. It suffered a staggering loss of Rs16.9 billion in 2008-09, which escalated to Rs118.7 billion within five years, despite efforts by successive governments to keep it afloat.
For years, China was seen as the frontrunner for PSM’s revival under the China-Pakistan Economic Corridor (CPEC) framework. However, the latest move suggests Islamabad is diversifying its international partnerships, possibly recalibrating its reliance on Chinese investment.
The agreement with Moscow is expected to involve technical assistance, infrastructure modernization, and increased production capacity, although full financial and operational details have yet to be disclosed.
Analysts say the deal could signal a broader geopolitical shift as Pakistan looks to reinvigorate its industrial base with support beyond its traditional allies.
More updates on the timeline, investment details, and modernization plans are expected in the coming weeks.
