As Pakistan’s private sector imports Afghan coal to fuel their plants, the government and people of war-hit Afghanistan are in a win-win situation to benefit from the economic activity generated through the bilateral trade.

Currently, three companies from Pakistan are in the coal trade with Afghanistan. But the two governments are yet to arrive on an agreement for the trade.

Recently, Afghan’s TOLO News reported that all of three Pakistani companies involved in the coal trade with Afghanistan were related to the Pakistan Army and that they were purchasing the coal at reduced rates.

However, the coal imports have been undertaken by private companies on both sides with no connection to the Pakistan government or state institutions.

The Afghan Ministry of Petroleum also denied the existence of any official contract with the government of Pakistan or any Pakistani organization regarding the export of Afghan coal.

The Afghan media report is based on misinformation and lacks authenticity as two out of said three companies are privately owned and have no links with the armed forces, an official source said.

Currently, Afghanistan’s coal trade market is one of its biggest revenue resources.

According to the Afghan Chambers of Commerce and Investment, the surge in exports of coal has resulted in a rise in the country’s annual revenue.

Wrong impression

The impression by Afghan media that Pakistan was robbing Afghanistan of its natural resources is an absolute fantasy because in this entire coal trade Afghanistan is in a win-win situation.

Under the trade, Afghan government is awarding contracts to all Afghan coal businessmen who hire Afghan labour for coal extraction. The extracted coal is transported through trucks owned by Afghans and the coal-laden trucks pay toll tax and export duty to the Afghan government to enter Pakistan.

At the end, Pakistan’s private sector also pays Afghan businesses to buy the coal. Pakistan power plants are the lone consumers of low-grade Afghan coal. In case Pakistan switches to other less expensive coal sellers, it will be detrimental to Afghanistan’s people, its mining industry and the government.

The export has helped the Taliban government to generate revenue. Reportedly, as of May 27, 2022, officials had collected around 3 billion Afghanis (USD 33.80 million) in customs revenue on more than 16 billion Afghanis worth of coal exports in the last six months.

Due to lack of any functioning international banking channels in Afghanistan, coal exports to Pakistan are a critical source of revenue for Afghan suppliers since they cannot effectively trade with any other country.

Evidently, mutually beneficial coal trade between Pakistan and Afghanistan undermines hostile designs of inimical forces.

An August 2021 investigation uncovered an illegal mining corruption ring in Afghanistan involving SOS international (SOSi) Virginia company with links to US military and intelligence, according to the Organized Crime and Corruption Reporting Project, a consortium of investigative centers, media and journalists operating in Eastern Europe.

Ex-Afghan President Ashraf Ghani’s brother Hashmat is the owner of SOSi subsidiary, Southern Development. SOSi has been operating in Afghanistan essentially as a front for the US DoD.

The inroads made by SOSi and Southern Development into Afghanistan’s mineral processing sector have roots in a 2011 initiative by U.S. special forces to work illegally with members of a pro-government Afghan militia on mining in Kunar province, the OCCRP said.

The recent increase in the prices of coal by Taliban government is also a point of concern which is likely to reduce the coal exports to Pakistan, if preventive measures are not taken.