The long-dormant Pakistan Steel Mills (PSM) — once a symbol of the country’s industrial might — may finally be on the path to revival.
The Russian government has formally presented two comprehensive proposals to rebuild the Karachi-based facility, offering a choice between a traditional blast furnace model and a modern electric arc furnace (EAF) system.
As per officials quoted by Business Recorder, the blast furnace plan would cost around $1.91 billion, while the EAF model carries a smaller price tag of $1.05 billion.
The proposals were recently submitted to Pakistan’s Ministry of Industries and Production following Special Assistant to the Prime Minister Haroon Akhtar Khan’s visit to Moscow in July — where both sides signed an agreement to explore revival and expansion of PSM.
The Cost Debate: Short-Term Savings vs. Long-Term Sustainability
Officials familiar with the discussions explained that while the EAF model appears cheaper initially, it depends heavily on imported scrap metal — a vulnerability for Pakistan given its volatile foreign exchange reserves.
Read more: Pakistan, Russia sign $2.6 billion agreement to revive long-dormant Pakistan Steel Mills
The blast furnace alternative, on the other hand, offers a more sustainable solution, as it permits for the use of locally sourced iron ore, minimizing dependance on imports in the long run.
“Local ore utilization means the project could become self-sufficient over time,” an industry expert said, adding that it would also support domestic mining and create new jobs.
Rebuilding a Legacy
Originally built in 1973 with Soviet assistance, PSM has remained largely idle for nearly a decade, with machinery deteriorating and workers left in uncertainty. The revival plan is being hailed as both an economic necessity and a symbolic restoration of Pakistan-Russia industrial cooperation.
Pakistan holds an estimated 1.887 billion tonnes of iron ore reserves, yet imports around $6 billion worth of steel and scrap annually to meet demand. Officials keep on believing that a modernized PSM could bridge the country’s 3.1 million-tonne production gap and catalyze growth across the construction and manufacturing sectors.
If realized, the project could mark a new industrial dawn — one that blends Pakistan’s raw potential with Moscow’s engineering legacy.