Pakistan Steel Mills Records Rs79.3 Billion Loss in 3 Years Despite Closure

Pakistan Steel Mills (PSM) recorded Rs79.3 billion in losses over the past three fiscal years despite having no production activity. Interest on legacy debt accounted for Rs57.4 billion, or about 72% of the total loss.

The state-owned mill has remained closed since June 2015. It recorded a Rs24 billion loss in FY2025-26. Interest expenses reached Rs17.7 billion during the year. The amount included Rs11.8 billion on government loans and Rs5.2 billion on commercial bank loans.

Salaries and Utility Costs Continue

PSM continued to incur costs despite the absence of production. Ministry of Industries figures show that the mill paid Rs3.9 billion in employee salaries over the three-year period.

The mill also spent Rs9.1 billion on fuel, electricity, water and gas. Salary and utility costs both fell in FY2025-26 compared with the previous year.

The Finance Division’s Central Monitoring Unit reported that PSM had a cash development loan of Rs108.2 billion in FY2025. It also had Rs40.2 billion in bank loans. Accrued interest stood at Rs141.5 billion.

Debt Restructuring and Revival Proposals

The CMU has recommended debt restructuring through debt-to-equity swaps and negotiated write-downs. It also proposed moving liabilities into a separate holding company as part of a government-led debt cleanup.

The CMU has recommended modernizing the mill with new furnaces, continuous casting technology and automation. It also proposed joint ventures with global steel manufacturers to bring foreign capital and technical expertise.

The Privatization Commission said in its latest update that pre-qualified parties are conducting due diligence and site visits for PSM. The commission has described the mill’s revival as an active part of its privatization work.