Investors demand decrease in royalty, tariff on coal

KABUL (Pajhwok): Some coal mining investors in Afghanistan have complained against high custom duty and royalty on coal mining at a time when its rate globally declined by 80 percent.

Nasratullah, a coal mine owner in the Dara-i-Suf’s Shabashak area, told Pajhwok Afghan News few months earlier one tonne of coal was sold against 5,500 afs in this area and 6,000 afs in Qarmaqul area but currently one tonne was sold against 900 afs or 1,300 afs.

He said this comes that one tonne of coal was accounted 1,800 to the owner who at the moment suffered up to 900 loss considering the quality of the coal.

“One tonne of coal is accounted 1,800 afs for us without considering the risk factor which means that there could be unfortunate incident in the mining site after which it has financial consequences for the owner,” he said.

In addition he said that the government charged 3,000 afs royalty on one tonne and 6,000 afs custom duty.

He said representatives of the coal miners had been visiting the government representatives over the past few months to reduce custom duty and tariff.

He said: “If the government reduced royalty on one tonne to 1,500 afs then they could sell one tonne of coal against 2,400 afs.”

He said, currently 80 percent work had stopped because the investors suffered losses and if the government did not reduce the royalty amount there is the possibility that work on other mines would have also stop.

Ghazi Mohammad, the representative of the Mohammad Nabi Nashir Coal Mine Company also acknowledged the prevailing situation and said he coal miners have shared their concerns with the ‘Islamic Emirate of Afghanistan’ (IEA) at different levels.

“We brought a letter from Kandahar as well and I hope that the problem would be resolved,” he said.

He added in the past the coal prices jumped in international market and at that time its royalty was increased in Afghanistan to 3,000 afs and the custom tariff was surged to 6,200 afs but now that global rates had declined there was no change in the royalty amount and tariff in Afghanistan.

In international market, last year in September one tonne of coal was sold against $465 but currently its rate had declined to $162.

Ghazi Mohammad said that many coal miners had stopped their work since there was no decline in the royalty and tariff charges after a decline in the world market.

He said if royalty declined to 2,000 afs and custom tariff to 2,700 afs as it was in the past most problems of coal miners would be resolved.

Mohammad Rasoul Totakhel, the Coal Exporters Union head also acknowledged the complaints of coal miners in this regard. He said coalminers were facing losses because the royalty and custom duty rates are skyrocket.

He said they shared the issue with the IEA officials often but received no positive response from them.

The issue was conveyed to the Ministry of Mines and Petroleum as well but no response was received.

Finance Ministry’s Spokesperson Ahmad Wali Haqmal said that royalty is mainly selected on the bases of the economic situation of the country and people, adding that the current royalty which is 3,000 per tonne which reasonable.

He said custom tariff is selected on the bases of demand and supply if there is increasing demand the tariff also grow and if there is decline in the demand the tariff also come down.

He said currently, custom duty on one tonne of coal was $60.

Referring to the deteriorated financial condition of coalminers, he said: “When there is change in the regional situation regarding coal demand then there will be change in the tariff as well. if there is need for the increase of decrease of tariff then definitely the change will happen.”

This comes that comparing to the last year September rates there was 80 percent decline in the price of coal in Afghanistan and 64 percent decline in world market.

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