The Pakistani government is mulling to set up a new steel mill in Karachi with Russia’s cooperation. The two countries have agreed to form a working group for the project.

The government has earmarked 700 acres of Pakistan Steel Mills (PSM) land for the new steel plant.

Although Pakistan is rich in iron ore, with an estimated reserves of 1.887 billion tons, it still imports about US$2.7 billion worth of steel every year.

Rana Tanveer Hussain, Pakistan’s Federal Minister for Industries and Production, said that domestic steel production is not enough to meet all demand, with a supply gap of 3.1 million tons last year.

The proposed steel plant site is strategically located near Port Qasim, which will help reduce transportation costs of raw materials, thereby providing a competitive advantage.