According to government sources, two separate protocols have been signed between Pakistan and the Russian company for the revival, modernization and restructuring of PSM.
The first protocol was signed in Moscow on July 10, 2025, establishing a framework for cooperation to restart and modernize Pakistan Steel Mills. The second protocol, signed during the 10th session of the Pakistan Russia Intergovernmental Commission on November 26, 2025, covers an assessment of the operational and capital expenditures required for the plant to resume production.
Feasibility study underway
Pakistani authorities are also reportedly conducting a study to assess the production costs that would arise if the plant resumes operations, as well as its commercial viability in domestic and international markets. The feasibility study is expected to play an important role in determining whether Pakistan Steel Mills can be operated on an economically sustainable basis after years of inactivity.
Once the studies are completed, the relevant authorities are expected to submit recommendations to the Cabinet Committee on State Owned Enterprises (CCoSOEs) on ending the liquidation process and restructuring PSM with the participation of international investors. The development marks a significant change in the Pakistani government's previous policy toward PSM.
Liquidation decision was made in 2024
The Pakistani government had previously decided to shut down and liquidate PSM. In May 2024, the Special Investment Facilitation Council (SIFC) decided to liquidate Pakistan Steel Mills after efforts to find a buyer for the facility failed. Following the decision, the Cabinet Rightsizing Committee approved the liquidation of the existing facility in August 2024.
However, renewed interest from Russia and potential technical and financial support for restarting PSM have led the government to reconsider its approach. The Ministry of Industries and Production has also reportedly received an official summary proposing that the liquidation process be suspended and the rehabilitation option be evaluated.
Awais Leghari also signals revival
Pakistan's Energy Minister Sardar Awais Leghari also announced that recommendations regarding the revival of Pakistan Steel Mills will be presented to decision makers shortly.
Speaking at an online meeting titled "Pakistan-Russia: Strengthening Trade, Education and Energy Collaboration," Leghari stated that economic and strategic cooperation between the two countries has strengthened in recent years. His comments have reinforced expectations that Russia could play a more active role in restructuring PSM.
Financial burden of millions of dollars continues
The prolonged shutdown of Pakistan Steel Mills continues to impose a financial burden on Pakistan's economy. Despite the liquidation decision, the government continues to cover salaries and other expenses for the remaining PSM employees. Some of the plant's debt and operating expenses are financed through revenue generated from scrap sales.
If the revival plan is implemented, Pakistan aims to bring the idle industrial facility back into productive operation and reduce the ongoing financial burden on the public budget.
However, before PSM can resume operations, its existing debts, infrastructure requirements, production costs, technology needs, and competitive conditions in global and regional steel markets need to be comprehensively assessed. If Russia or other international investors become involved, the project could also create significant opportunities for Pakistan's steel industry in terms of technology transfer, new investment and employment growth.
The critical next step for the future of Pakistan Steel Mills will be the completion of the ongoing feasibility studies and the government's formal termination of the liquidation decision and approval of a restructuring model.
Comments
No comment yet.