Karachi - Shareholders of Tuwairqi Steel Mills Limited (TSML) hold Extra Ordinary General Meeting (EOGM) to decide about the future of their $340 million investment in Pakistan
The EOGM was called by the shareholders to decide about the future of TSML, as the Government has not yet been able to honour its assurance for providing feedstock gas at a price that was originally agreed upon to ensure a level playing field. The DRI plant of TSML after its 100pc capacity test run is in ‘shutdown mode’ since September 2013. Consequently, TSML has sustained a loss to the tune of $18.6 million in 2013 and almost similar would be the position in 2014.
With an investment of $340 million already made and a further planned investment of around $890 million, through its forward & backward integration (as envisaged in the HOT already shared with the GOP), provided the ongoing operation of the DRI plant is not bleeding, the shareholders were aiming to make TSML the largest fully integrated steel manufacturing complex in Pakistan, with a production capacity of 1.5 million tons per annum.
The project was supposed to ensure a host of econometric and collateral benefits, including creation of jobs for another 5,000 people and a socio-economic transformation in Balochistan though its backward integration, with the mechanised mining of iron ore, its beneficiation and pelletisation of around 2.2 million tons per annum.
Despite the fact that the plant is in a ‘shutdown mode’ for the last over one year, still not a single employee of TSML has been laid off so far, with the hope and keen desire that the operations would restart.
In the EOGM held the shareholders weighed different legal options to protect their rights. They also resolved that in the event the ECC in its next meeting does not accord approval to the feedstock tariff to make the ongoing operations of the DRI plant of TSML commercially viable, in line with stipulations of MoU and in consonance with the recommendations made by OGRA, shareholders shall be left with no option but to exit from Pakistan.