Pakistan, Russia to sign EPC agreement for PSM revival

ISLAMABAD: Pakistan and Russia are set to sign an Engineering, Procurement, and Construction (EPC) agreement for the revival of the Pakistan Steel Mills. A feasibility study, to be completed by September 15, will guide the project’s direction.

The study will be conducted—and financed—by a Russian firm. According to officials from the Ministry of Industries and Production, the assessment will determine whether the mills will be restored using blast furnace technology or through an alternative method. Installing a new blast furnace is estimated to cost $1 billion, while melting and removing the frozen ore from the existing furnace would require around $400 million.

Russia has not only offered an EPC contract but is also willing to provide financial assistance for the rehabilitation project. However, Pakistan will be required to contribute partial funding. Additionally, 700 acres of Pakistan Steel Mills’ land has been earmarked for establishing the new facility. The full rehabilitation process is expected to take approximately one year. If successfully revived, the project could save Pakistan an estimated $4 billion in foreign exchange and reduce annual steel import costs by $3.5 to $4 billion.