BPE
January 8, 2006
Nigerian Coal Corporation
Location of the Industry     –          Enugu
Ownership Structure            –          100% Govt Owned
The Nigerian Coal Corporation was established in 1950 and it is 100% owned by the FGN. The headquarter is located at No 25 Okpara Avenue, Enugu.
SECTOR DATA
Coal exploration in Nigeria started as far back as 1916. Available data show that coal (mainly sub-bituminous stream coals except for the Lafia-Obi bituminous coking coal) is available in more than 22 coalfields spread over 13 States in Nigeria. The proven coal reserves are about 639 million metric tonnes while the inferred reserves are about 2.75billion metric tonnes.
Presently, the Nigeria Coal Industry has 4 existing mines
- Okpara and Onyeama underground mines in Enugu State,
- Okaba surface mine in Kogi State and
- Owukpa underground mine in Benue State.
In addition, there are more than 13 underdeveloped coalfields.
The developed Coalfields in Nigeria are of two categories, viz:
- The virgin coal fields where further detailed exploration work and/or access roadways is required, and
- The developing coalfields where reserves have been proven and mine access roadways developed.
The latter include: Azagba Lignite field, in Delta State; Ogboyoga coalfield in Kogi State; Ezimo coalfield in Eungu State; Lafia-obi coalfield in Nassarawa State and Inyi coalfield in Eungu State; while others are located in Amansiodo in Eungu State, Ute in Ondo State; Lamja area of Adamawa State; Gindi-Akunti in Plateau State; Afuze in Edo State; Janata-koji area of Kwara State and extension of Okpara mine south in Eungu State.
Successfully re-kindled the interest of government, individuals
POLICY ISSUES AND REVIEW OF ENABLING LAWS
The present emphasis of the government on solid minerals development has necessitated the creation of a new ministry in 1995; The Ministry of Solid Minerals Development, which is charged with enormous task of ensuring a rapid but orderly development of the hitherto, neglected but richly abundant sold mineral resources in Nigeria.
The BPE, in collaboration with the ministry, has fashioned out a new National Policy on solid minerals which was approved recently by the government under the auspices of the ministry, the mining laws and regulation have been amended and also approved by the government and will soon be enacted into law. The thrust of the new policy and the revised laws is for government of Nigeria to encourage and catalyze the private sector (foreign and local) to play a leading role in the development of the sub-sector. All inhibiting laws have been abrogated including governmentâs monopoly on mining coal and bitumen.
Towards this end, the governmentâs role through the ministry and its parastatals has been re-defined along the following lines:
- Provision of the necessary data, infrastructure, rules and regulation to enable the private sector play a meaningful and effective role and earn its just rewards on its investment in the sub-sector
- Allow concessional duties and dues on importation of mining input, exportation of solid minerals and some years of tax holidays, etc
- Promotion of the exploitable minerals, availability of the incentives and creation of awareness for demand of sold minerals products.
- Sustainable development of the Solid Minerals Sector including Coal.
- Of all the exploitable solid minerals in Nigeria, coal is one of the most viable in terms of abundance, spread of reserves, baseline development, manpower availability, domestic utilization and export potentials.
PRODUCT SHARING JOINT VENTURE ARRANGEMENT
Under the product sharing joint venture arrangement, the Nigerian coal corporation shall sign an agreement with a private company which is to under take at its risk and cost, general surveys, exploration and feasibility studies, where these have not been done already by the corporation, for the exploitation of the coal potentials within a delineated area of the countryâs coal reserves for an agreed term under a coal mining sublease title. The company will also subsequently develop the mine to commence coal production within an agreed period but usually not exceeding three (3) years.
As soon as production starts, the company is to pay between 5% and 15% of its total coal production in coal or in cash as fees to Nigerian Coal Corporation and is free to market the remaining percentage of between 85% and 95% of their coal output especially for export. However, the corporation reserves the option to buy part or all of the companyâs coal output at the prevailing international market price of coal for domestic use.
The company is encouraged to involve the local communities by offering them some percentage (not more than 12%) of the companyâs shares with respect to the venture so as to avoid disruption of operations of the company due to community social stress.
The company retains the right to terminate their involvement if the venture proves to be unprofitable. Generally, such companies will be regarded as subsidiary or affiliated companies and an appropriate reporting system worked out during negotiations to ensure adequate performance monitoring and supervision of their operations in accordance with mining laws and regulations.
CURRENT AND POTENTIAL UTILISATION OF NIGERIAN COAL
Within the country, coal is used presently as an energy fuel in cement production, brick factories, foundries, and laundry and bakery industries. Other factories for which it forms an important raw material base are in tyre and battery manufacture as well as substitute for fuel wood in domestic cooking.
A Survey of coal utilization in the country revealed a great potential in the following industries:
METALLURGICAL INDUSTRIES:
Nigeria Coal is suitable as a component blend with foreign coking coals to produce coke of acceptable strength and character for the countryâs steel plants. In this regard, up to 200,000 metric tonnes of Nigeria coal will be required annually when Ajaokuta Steel plant goes into full production. Okpara and Onyeama coal in Eungu State have been earmarked to provide a source of future coal supply to the steel sector:
FUEL WOOD SUBSTITUTE:
Coal and its derivatives, smokeless coal briquettes have been demonstrated as the cheapest, safest and therefore the most suitable substitute to fuel wood, the continued use of which in Nigeria is causing deforestation with the attendant environmental degradation of desertification in the north and soil and coastal erosion in the south. The production of smokeless coal briquettes involves setting up of coal carbonization/briquetting plants. In addition, the by-products of carbonization which include gases, ammoniacal liquor, tar oils and many aromatics will serve as feed-stock to downstream chemical industries in the same manner as the petrochemicals;
POWER GENERATION:
Nigeria coal are suitable as energy fuel for electricity generation for the abandoned Oji power station in Enugu State and other proposed power station at Kogi, Benue, Anambra and Delta States. With the current deregulation of power generation in the country, which was facilitated by the lack of sufficient power generating capacity by the National Electric Power Authority, Nigeria is a fertile ground for the independent power producers.
The current / potential levels of coal utilization in the country are as follows:
              (i)       Cement Manufacture                                               Tonnes per annum (tpa)      Â
                                –    Nigeria Cement Company
                                (Nigercem), Nkalagu:
Installed coal capacity utilization for 6 kilns                             140,000tpa
Current coal capacity utilization for 1 kiln                                20,000tpa
Prospect of expanding current capacity
Utilization                                                                                   Yes         Â
Â
           Ashaka Cement Company, Gombe: Â
Installed coal capacity utilization                                       300,000tpa
Current coal capacity utilization                                               None
Prospect of expanding current capacity
Utilization                                                                              Yes
           Proposed Kogi Cement Company Abajina, Kogi State:
Current coal capacity utilization                                                None
Prospect of expanding current capacity
Utilization                                                                       Yes (300,000tpa)
(ii)Â Â Â Â Â Â Other Industrial User:
           West African Batteries Ltd (exide) Ibadan:
Installed coal capacity utilization                                             200,000tpa
Current coal capacity utilization                                                     None
Prospect of expanding current capacity
Utilization                                                                                     Yes
(iii)Â Â Â Â Â Metallurgical use by Ajaokuta Steel Plant:
Installed coal capacity utilization as blend
with imported coking coal                                                   200,000tpa
Current coal capacity utilization                                                   None
Prospect of expanding current capacity
Utilization                                                                       Yes (200,000tpa)
(iv)Â Â Â Â Â Coal Carbonization / Briquetting Plants:
                               Installed coal capacity utilization                                                  None
Prospect of installing plants for coal utilization
for replacement of fuel wood                                            Yes (200,000tpa)
     (v)      Electricity Generation
Oji Power Station                                                              120,000tpa           Installed coal capacity
Utilization                                                                          None
Prospect of expanding current capacity utilization                 Yes
           Proposed Abajina / Makurdi Power Stations in
                          Kogi and Benue Respectively
Installed coal capacity utilization                                       None
Prospect of installing Plants                                              Yes (300,000 tpa)
          Â
           Proposed Enugu State Power Station:
Installed coal capacity utilization                                       None
Prospect of installed Plant                                                Yes (300,000 tpa)
           Proposed Onitsha / Asaba Power Station in
                          Anambra and Delta States respectively:
Installed coal capacity utilization                                       None
Prospect of installing Plant                                               Yes (300, 000tpa)
(iv)Â Â Â Â Â Coal Export â Nigerian coal is generally characterized by low sulphur, medium to high calorific value, low ash and low moisture contents and therefore is environmentally friendly. Nigeria coals are therefore in great export demand and are most suitable for blending purposes especially with high sulphur content coals. Presently the aggregate Nigerian coal potential demands stand at about 15 million metric tonnes annually. Big time coal investors are therefore invited to satisfy this potential coal export market from Nigeria.
Market Environment
Comparative prices of some energy fuels on heat equivalent basis in urban areas in Nigeria. 2000
| Fuel | Retail Price
N |
Unit |
Gross Calorific Value (Kcal/kg) | Avg. End Use Efficiency (%) | Avg. net Useable Heat (Kcal/Kg) | Fuel Price Per 103 Kcal (Naira) |
| (a) | (b) | (c) | (d) | (e) | f =(dxe) | g = (b/f) x 103 |
| Wood (use of tripod) | 10.00 | Kg. | 3,500 | 7.5 | 262.5 | 38.10 |
| Wood (use of stove) | 10.00 | Kg. | 3,500 | 20 | 700 | 14.29 |
| Ordinary Charcoal | 8.00 | Kg. | 6,000 | 20 | 1,200 | 6.70 |
| Carbonised wood charcoal | 15.00 | Kg. | 6,000 | 20 | 1,200 | 12.50 |
| Electricity (industry) | Kwh | 860 | 75 | 645 | 7.35 | |
| Electricity (Domestic) | Kwh | 860 | 75 | 645 | 4.12 | |
| Kerosene (DPK) | 20.70 | Kg. | 10,102 | 35 | 3,536 | 5.85 |
| Diesel (AGO) | 22.17 | Kg. | 9,983 | 35 | 3,494 | 6.35 |
| LPG | 50.00 | Kg. | 11,700 | 52.5 | 6,142.5 | 8.14 |
| LNG (?) | 167.00 | Kg. | 11,700 | 52.5 | 6,145.5 | 27.19 |
| Raw Coal | 7.00 | Kg. | 6,298 | 30 | 1,889.4 | 3.70 |
| Smokeless coal Briquette | 10.00 | Kg. | 11,214 | 50 | 5,607 | 1.78 |
| Â | Â | Â | Â | Â | Â | Â |
QUALITY OF NIGERIAN COAL
Nigerian coal is generally characterized by low sulphur, medium to high calorific value, low ash and low moisture contents and therefore is environmentally friendly. Nigeria coals are therefore in great export demand and are most suitable for blending purposes especially with high sulphur content coals. Presently the aggregate Nigerian coal potential demands stand at about 15 million metric tonnes annually. Big time coal investors are therefore invited to satisfy this potential coal export market from Nigeria.
| Quality Parameter | Owukpaâs | Okaba | Okpara | Ogwashi Azagba Lignite | Inyi | Ezimo | Ogboyoga | Lafia-Obi Bituminous |
| Moisture (% a.r) | 8.3 | 15.4 | 7.5 | 37.5 | – | 11.5 | 13.9 | – |
| Ash (% a.r) | 8.6 | 7.3 | 8.4 | 4.2 | 6.5 | 6.8 | 8.0 | 14.7 |
| Vol. Mat. (% a.r) | 38.6 | 36.4 | 38.26 | 37.9 | – | 39.9 | 34.9 | 31.7 |
| Gross Cal. Value Kcal/kg (a.r) | 6,430 | 5,888 | 6,628 | 5.098 | 5,257 | 6,089 | 6.089 | 7,637 |
| Fixed Carbon (%a.r) | 43.8 | 40.2 | 45.38 | 20.4 | – | 43.5 | 43.5 | – |
| Hydrogen (% a.r) | 4.6 | 3.8 | 4.11 | 4.6 | – | 3.8 | 3.8 | – |
| Total Sulphur (%a.r) | 0.72 | 0.73 | 0.54 | 0.64 | 1.06 | 0.55 | 0.55 | 1.0 – 3.5 |
| Nitrogen (% d.b) | – | – | 1.44 | – | – | 1.76 | 1.76 | – |
| Sulphate Sulphur (% d.b) | 0.02 | – | 0.01 | 0.05 | 0.05 | – | – | 0.01 |
| Sulphur (% d.b) | 0.02 | – | 0.05 | 0.02 | 0.75 | – | – | 1.4 |
| Organic Sulphur (% d.b) | 0.83 | – | 0.69 | 0.71 | 0.67 | – | – | 0.07 |
| Swelling No (FSI) | 0 | Â― | 1 | Â― | 0 | 0 | 0 | 9 |
| Hard Gore Index (HGI) | – | 52.0 | 37.8 | – | – | – | – | – |
| Dilatometer Test: | ||||||||
| Softening Point | 357 | – | 356 | 357 | 356 | – | – | 375 |
| Reconsolidation Point oc | 483 | – | 477 | 468 | 462 | – | – | 436 |
| Softening Range | 126 | – | 121 | 111 | 87 | – | – | 149 |
| Contraction (%) | 15 | 9 | 27 | 23 | 2 | – | 9 | 30 |
| Dialation (%) | 0 | 0 | 0 | 0 | 0 | – | 0 | 190 |
| Gray King Coke Type | – | – | – | – | – | – | – | G9 |
| Maximum Fluidity (ddpm) | – | – | 3 | – | – | – | – | 27.600 |
| Mean Max. Reflectance | – | 0.45 | 0.45 | – | – | – | – | 1.00 |
| Ventrinite (%) | – | 41 | 51.4 | – | – | – | – | 98 |
| Exinite (%) | – | – | 8.4 | – | – | – | – | 0 |
| Inertinite (%) | – | 49 | 30.2 | – | – | – | – | 2.0 |
| Gray King Assay (600 0c) | – | – | ||||||
| Coke / Char (W%) | – | – | 67.0 | – | – | 65.0 | – | – |
| Gas (Lit / 100g) | – | – | 10.3 | – | – | 11.7 | – | – |
| Tar & Light Oil (W%) | – | – | 17.7 | – | – | 18.5 | – | – |
| Liquor (W%) | – | – | 6.4 | – | – | 8.7 | – | – |