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The Taliban’s black gold: militants seize on coal to reboot economy

Dozens of men and boys, covered head to toe in coal dust, stream in and out of the mine shafts bored deep into a mountain in northern Afghanistan.

In the mines below Nahrain in Baghlan province, children as young as eight work as labourers, loading the fossil fuel on to donkeys which carry it to trucks bound for Kabul. They work with no machinery or safety gear.

Thanks to the global surge in commodity prices amid the Ukraine war and Covid-related disruption, business is booming at Afghanistan’s coal mines. This gives the Taliban a crucial revenue stream as the militant group — after seizing control a year ago — seeks to revive an economy shattered by international isolation and sanctions.

“It was good luck for the Taliban that the price of coal immediately went up after they came,” said Malang, a 60-year-old man helping carry coal to waiting trucks.

Since the departure of Nato forces and the Taliban’s ousting of the western-backed government, Afghanistan has suffered a dramatic economic collapse. The economy contracted at least 20 per cent last year as the international aid that made up three-quarters of the previous government’s budget was halted and $9bn in foreign reserves was frozen.

Najibullah, 35, has worked for 20 years in the mines, his 12-year-old son Noorullah for 4. Najibullah’s father and grandfather also worked there © Oriane Zerah/FT

To reboot the economy, the Taliban have aggressively increased coal exports, brushing aside environmental and ethical concerns in a bid to boost, control and tax trade in the commodity as well as other resources from minerals to fruit.

Much of the coal makes its way along precarious mountain roads to Kabul and on to Pakistan, from where some is sent to China. David Mansfield, author of a report on cross-border trade under the Taliban, estimates that coal exports to Pakistan have doubled to around 4mn tonnes a year since the group took power.

The previous government had begun work on a green transition, but the Taliban have embraced fossil fuels, according to Abdallah al-Dardari, the UN Development Programme’s Afghanistan chief. After the Taliban took over, the plans to green the economy “fell apart . . . People went ahead and started exploiting the coal mines [and] coal started booming”, he said.

The Taliban have so far proven surprisingly effective at controlling the trade, cracking down on rampant bribery and smuggling, said Mansfield: “We’ve seen a massive shift . . . The Taliban have been quite adept in terms of regulating and controlling [the] border points.” As well as boosting revenues, this has allowed them to consolidate power by preventing regional warlords and factions from having independent revenue sources, he added.

Although imports have fallen sharply, the UN expects Afghanistan’s total exports to increase this year to about $1.8bn from $1.2bn in 2019.

Afghanistan’s rich mineral wealth has long tantalised governments and investors. Some estimates put the total value of its vast reserves of everything from lithium to gemstones at as much as $1tn. But decades of instability have limited exploration and mining.

In 2007, the Chinese state-owned China Metallurgical Group Corporation secured the rights to Mes Aynak, one of the world’s largest known copper reserves. However mining at the site south-east of Kabul is yet to begin.

Chinarak mine in Baghlan province, north of Kabul © Oriane Zerah/FT
Workers carry coal by hand to a truck which will travel to Kabul © Oriane Zerah/FT

The Taliban funded their own insurgency partly by regulating and taxing trade in everything from precious stones, such as lapis lazuli, to the widespread opium poppy crop.

Nooruddin Azizi, Afghanistan’s commerce minister, said in an interview that Kabul was in talks with investors from China, Russia and elsewhere to strike mining and fossil fuel deals.

“The attention that the Islamic Emirate has given to trade is better than any of the previous regimes,” he said, using the Taliban’s name for Afghanistan. “We want to make economic trade separate from military matters. We don’t have any problems trading [with anyone].”

However, no large international deals had yet been finalised, he said, with mining activity still domestic and relatively small-scale. The mining ministry says 17 of 80 coal mines are operational, mostly in the north.

Mining is often brutal. In Nahrain, the miners — around half of whom appear to be teenagers or younger — work in precarious conditions for meagre pay.

Many have followed generations of their family into the mines, such as 35-year-old Najibullah, who started alongside his father and grandfather as a teenager. He has been joined by his 12-year-old son Noorullah.

Child labour long predates the Taliban but the number of children working the mines has reportedly increased as the economic crisis forces them out of school, analysts say.

“In Afghanistan, without this work there would be nothing,” said Atiqullah, a 14-year-old who said he started working in the mine when he was eight. “We have to come here, but who is happy working hundreds of metres down a tunnel?”

Child labour has reportedly increased since the Taliban takeover as economic pressures force them from spending time at school © Oriane Zerah/FT

Mohammad, a 55-year-old farmer who started mining in Nahrain after flooding damaged his land, said higher prices meant miners’ earnings had effectively doubled since the Taliban took over.

“The labourers don’t care about politics,” he said. “They only care about having work and earning money.”

Esmatullah Burhan, the mining ministry’s spokesman, said more foreign investment and technology would improve working conditions and help curtail child labour.

The Islamists have pledged to stop exploiting one of Afghanistan’s most notorious resources and largest exports — opium poppies. The regime announced a ban in April, but experts say it is too early to tell if this will be enforceable. Cultivation more than doubled after the US invaded in 2001 after the 9/11 terror attacks, according to UN figures, despite the billions of dollars spent on eradication efforts.

With international banks largely unwilling to intervene because of sanctions, the coal trade is mostly financed through informal money traders, who charge high fees. But it remains economically attractive, particularly as alternatives disappear.

Mohammad Azim started trading coal after losing his job following the Taliban’s takeover, buying it at the mines in Nahrain and selling it on to Kabul. Export demand was extremely high, he said, adding: “If it keeps on going like this, I’m not sure Afghans will have coal left to buy in the winter.”

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