Govt Scraps Pakistan Steel Mills Shutdown, Turns to Russia for Revival

The government has decided to revive Pakistan Steel Mills instead of proceeding with its earlier plan to liquidate the state owned steel producer, as international interest in restarting the dormant industrial giant has emerged.

The change in policy follows consultations with Russia’s Industrial Engineering LLC on the revival, modernization and restructuring of Pakistan Steel Mills. Two protocols have already been signed between the Russian company and PSM under the Ministry of Industries and Production, reported Business Recorder.

The first protocol, signed in Moscow on July 10, 2025, covers cooperation on the revival, modernization and restructuring of PSM. A second protocol signed on November 26, 2025, focuses on assessing the operational and capital expenditure requirements for manufacturing.

The government has also conducted an assessment of production costs and market feasibility. The findings are expected to help determine whether the mill can be commercially revived. A formal summary has been submitted to the Ministry of Industries and Production, with the concerned authority expected to recommend to the Cabinet Committee on State Owned Enterprises that the liquidation process be stopped.

The government had previously decided to scrap PSM after failing to find a buyer. The Special Investment Facilitation Council decided in May 2024 to scrap the mill, while the Cabinet Committee on Rightsizing approved liquidation of the existing facility in August 2024.

Power Minister Sardar Awais Leghari has also said recommendations for reviving PSM will soon be submitted to policymakers, adding to renewed efforts to restart the country's major steel producer. The government continues to bear the salaries of the remaining PSM employees, while the mill’s bills are being covered through proceeds from the sale of scrap.

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