Golden opportunity for cement manufacturers as Afghanistan slashes duties

Cement manufacturers in Pakistan's northern region could be set to make a windfall in earnings as Afghanistan's Ministry of Mines and Petroleum has announced a reduction in custom tariff by $15/tonne and royalty fees by $5/tonne on exported coal.

"The primary reason is that international coal prices have dropped, making it more viable for cement companies to import it than procure Afghan coal," explains Fahad Rauf, Head of Research at Ismail Iqbal Securities. “The savings companies are set to make must be viewed in the context of the North and South regions. This is because Afghan coal is more economical for players in the North due to lower transportation costs compared to players in the South,” emphasises Mustafa Mustansir, Director Research and Business Development at Taurus Securities.