Taliban boosts coal exports to increase local budget in Afghanistan

Officials say the Afghan Taliban are increasing coal shipments to Pakistan and raising sales charges, as the organization seeks to increase cash from its mining industry in the absence of direct foreign assistance.

The decision comes as global coal prices are reaching record highs, following a stunning halt on exports by key producer Indonesia earlier in 2022, followed by Russia’s invasion of Ukraine, which pushed prices even higher.

Because no country has recognized the Taliban administration, foreign financial aid has dried up, even as the country suffers a humanitarian and economic disaster.

To survive, the radical Islamist organization is increasingly relying on its natural riches. Afghanistan’s landlocked country possesses vast mineral and fossil fuel reserves, the majority of which are unexplored.

“We have freed the road for merchants, thus coal exports have surged,” said finance ministry spokesperson Ahmad Wali Haqmal.

In the previous six months, he added, authorities earned roughly 3 billion Afghanis ($33.80 million) in customs revenue on more than 16 billion Afghanis worth of coal shipments.

In addition to greater sales, the tax on coal exports was raised to 30% from 20% last week, according to an official document obtained by the media and verified by Haqmal.

The Taliban released their first annual budget earlier this month, stating that they would rely completely on domestic money – a difficult challenge for a country that has relied on foreign aid for the last two decades.

Exports and income, according to Haqmal, were significantly greater under the previous administration, which was deposed when the Taliban surged to power following the withdrawal of US-led international forces from Afghanistan last year.

Khan According to Jan Alokozi of the Afghanistan Chamber of Commerce and Investment (ACCI), revenues have grown as a result of the Taliban’s efforts to combat corruption.

While the dictatorship hopes to grant precious resource mining contracts, coal is already paying off.

According to Mufti Esmatullah Burhan, acting Deputy Minister for Mines and Petroleum, four domestic businesses are producing coal, largely in northern areas, while Pakistan has boosted coal imports from Afghanistan.

Importing coal from Afghanistan might help Pakistan cut prices and lessen its reliance on South African supply, which is experiencing logistical difficulties due to increased demand for the fuel in Europe.

Pakistan’s trade ministry has yet to respond to a request for comment from the media.

Currently, South Africa supplies over three-quarters of Pakistan’s coal needs, mostly for the country’s nascent cement sector.

Pakistan has expanded coal imports from Afghanistan, according to one Pakistani official who spoke on the condition of anonymity, and might be buying up to 500,000 tonnes per month.

Pakistan is not buying as much liquefied natural gas (LNG) on the spot market, according to the official, due to the country’s depleting foreign exchange reserves and rising international pricing as a result of the war in Ukraine.

Engineer Asif Khan, a Pakistani coal dealer who imports coal from Afghanistan, said business was good, but Afghan traders boosted coal prices when the Taliban imposed taxes.

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