Afghanistan’s Ministry of Mines & Petroleum has decided to lower coal royalties by $5 per ton and customs tariffs by $15 per ton due to falling global coal prices.
According to JS Global, the move is positive for North-based cement companies and will potentially translate to a reduction of ~Rs. 5,800 per ton (assuming PKR/USD of 290) in Afghan coal prices taking the price to ~Rs. 44,000 per ton.
With some reported ease-off in the letters of credit (LC) situation of late, local cement companies, particularly in the South have attempted to go for South African coal due to the gap between Afghan and other sea-borne imported coal prices.
Since their most recent peak of over $360 per ton in early September 2022, South African coal prices have decreased by c. 75 percent trading around $95-100 per ton.
The delivered-to-plant price of South African coal for North-based companies comes to around Rs. 41,000 per ton at prevailing rates.
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