The government is considering a proposal to establish a new steel mill in Karachi with Russian cooperation and both countries have agreed to form working groups to move forward on the project, according to an official statement issued by Pakistan on Wednesday.

In this regard, Deputy Minister of Industry and Trade Russian Federation Aleksei Gruzdev met with Minister for Industries, Production and National Food Security Rana Tanveer Hussain on Wednesday, the ministry said.

According to details, Rana Tanveer Hussain informed that the government has earmarked 700 acres land of Pakistan Steel Mills for establishing a new steel mill.

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He said despite being blessed with considerable reserves of iron ore (estimated reserves of 1887 million tons), Pakistan is forced to import around $2.7 billion of iron and steel.

“There is a perpetual gap between domestic production and demand of iron and steel. For the last year, the gap is estimated at 3.1 million tons,” the minister was quoted as saying in the statement.

Last month, Business Recorder had reported that a high-level committee, headed by Minister for Planning, Development and Special Initiatives Ahsan Iqbal, had directed the Ministry of Industries and Production to share feasibility study and business plan to attract investors for setting up of new steel mills with Russian collaboration.

Pakistan’s per capita steel consumption level is below even those of developing countries indicating significant growth potential over medium and long term, according to the ministry statement.

The minister said efficiency of Pakistan’s steel industry is limited as it segmented (600 small units) and based on old inefficient technology.

The proposed site is located at Karachi and in-closed to Port Qasim that may reduce cost of transportation of raw materials.

Pakistan’s industrial and agricultural experts are set to visit Russia, marking a significant step in strengthening bilateral ties between the two nations, the statement added.

During the meeting, they emphasised on balance trade between both countries.

Rana Tanveer stressed the need for modern agricultural machinery to boost crop yields and enhance agricultural productivity. He said the government would provide all the facilities to the Russian investors in the country.

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Aleksei Gruzdev said Russia would provide modern agricultural machinery to Pakistan to boost crop yields and enhance agricultural productivity across the country.

The meeting was attended by deputy trade representative of the Russian Federation in Pakistan Denis Nevzorov, secretary for industries and production Saif Anjum, secretary national food security and research Ali Tahir, additional secretary national food security Amir Mohyudin, deputy chief industries and production Abdul Samad and Executive Engineer PSM Engr. Muhammad Shoaib.