Afghan Coal

As per the USGS survey, Afghanistan’s coal resources are estimated around one billion metric tons

Though there are no systematic surveys on mines and minerals done in Afghanistan, some basic studies show that the country has a huge amount of mines and minerals, including coal. Coal resources are located in 16 provinces of the country. Major coal resources are located in Samangan, Baghlan, Bamiyan, Takhar and Balkh province. As per the USGS survey Afghanistan’s coal resources are estimated around one billion metric tons. The same survey shows a 750-kilometer underground coal line from north-eastern Badakhshan Province to the south-western Herat Province. This puts Afghanistan as one of the first countries that has enough high-quality coal that is not yet extracted systematically. Long internal wars, political and security instability, lack of standard transportation and proper roads to and from the coal mines are some of the reasons that the coal mines are not yet legally and professionally extracted. Afghanistan’s coal resources are extracted through small-scale mining, mainly from mining sites in Bamiyan, Samangan and Baghlan provinces. Coal resources in Afghanistan are mainly produced by Northern Coal Enterprises (NCE), the only state-owned coal enterprise. In 2019, eight private companies were engaged in coal extraction in the country.

The rising coal prices in the international market–due to the Ukraine conflict and supply chain issue arising due to multiple factors including the rising oil prices– has caused shipping of coal more expensive, and this has seen significant boost in Afghan coal prices. Per the Ministry of Finance, in 2021 the price of one ton of exporting coal was 90$ with 20$ tax; but due to the aforementioned reasons lately, the price including its transportation increased to 200$ and then to 280$ and taxes increased from 20$ to 30$. The export tariff also increased from 27$ to 60$.Inside Afghanistan, a metric ton of coal costs around 150$ when bought from wholesalers in Kabul. This includes the prices of coal (75$) plus the 20$ tax and transportation costs. This is a double fold rise from 2021 prices.

Recently Afghan coal business has seen an unprecedented boost because of the Russian-Ukrainian conflicts and rising oil prices which saw most coal exporting countries like Indonesia suddenly decreased or declined coal exports. In the international market the price of coal has tripled since the beginning of 2022. On 3rd January 2022 one ton coal was sold for 157$, by 8th September 2022 the price had reached 439$. While the prices have gone down since the peak in September, extreme fluctuations still exist in the coal market and a return to the highs can not be ruled out.

Afghan Coal

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