The government has abandoned its plan to liquidate Pakistan Steel Mills and is now pursuing a full revival of the dormant industrial giant, with Russia’s Industrial Engineering LLC stepping in as the key partner for the turnaround effort.

The policy reversal follows months of consultations between the Russian firm and PSM under the Ministry of Industries and Production, during which two protocols have already been signed. The first, inked in Moscow on July 10, 2025, covers cooperation on the revival, modernisation, and restructuring of the mill. A second protocol, signed on November 26, 2025, focuses on assessing the operational and capital expenditure needed to restart manufacturing.

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

The turnaround marks a sharp departure from the government’s earlier stance. After failing to find a buyer, the Special Investment Facilitation Council decided in May 2024 to scrap the mill, and the Cabinet Committee on Rightsizing approved the liquidation of the existing facility in August 2024.

Power Minister Sardar Awais Leghari has confirmed that recommendations for reviving PSM will soon be submitted to policymakers, adding weight to the renewed push to restart the country’s largest steel producer. In the interim, the government continues to cover the salaries of remaining PSM employees, while the mill’s bills are being met through proceeds from the sale of scrap.