Century Steel Mill Threatens Shutdown Amid Mounting Challenges in Rashakai Economic Zone

China’s Century Steel Mill has issued a stark warning about shutting down its operations in the Rashakai Special Economic Zone (SEZ), citing insurmountable challenges. The SEZ is a flagship project under the China-Pakistan Economic Corridor (CPEC) framework and is prioritized by the China-Pakistan Joint Cooperation Committee.

In a letter addressed to Prime Minister Shehbaz Sharif, Century Steel highlighted 18 critical grievances, signaling its intent to halt the project if issues remain unresolved.

The company expressed concerns over the high cost of land within the economic zone, which it claims has rendered the project financially unviable. Additionally, unfair competition from steel mills in the Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA) is reportedly impacting the entire steel industry in Pakistan.

Century Steel further criticized inconsistent tax policies in the steel sector, citing closures of major players such as Amreli and Agha Steel as examples of the ongoing instability. Operational hurdles include power shortages, delays in approvals from the National Electric Power Regulatory Authority (NEPRA), and pressure to establish a solar power plant for electricity within the zone.

Other challenges mentioned in the letter include declining demand for steel products due to rising costs, security expenses, and obstacles in importing machinery, despite directives from the State Bank of Pakistan.

“This is our final communication. If the situation doesn’t improve, we will begin dismantling the plant,” the company warned in the letter.

The potential closure of Century Steel Mill poses a significant blow to the CPEC framework, raising concerns over the sustainability of investment-friendly conditions in Pakistan.