Russia is to provide a loan of $350M for a Pakistan Steel mill expansion project.
The mill’s capacity will rise from 1.1 to 1.5Mt/y once the expansion is completed.
The deal was signed during a recent Russian delegation visit to Pakistan.
Pakistan Steel is in debt by about PKR55bn and the expansion is expected to help turn the company around.
The mill is of an obsolete design and has low capacity use resulting in low sales and mounting losses. Pakistan Steel has invested into maintenance and mandatory repairs, which have resulted in the deterioration of machinery and equipment.
Current steel demand in Pakistan is around 5.5 to 6Mt/y so the present government has accorded priority to the expansion of the mill.