Nigerias coal potential grossly underperforms

first_imgNigeria’s Business Day reports that “coal which used to be a major source of energy in the country before the discovery of oil is gradually on the brink of collapse.” “There are no coal power plants operating in the country currently because there were factors to consider in designing and running them. For you to be able to build a coal power plant you must determine the amount of coal deposit you have and how many years it can last,” the Minister of Mines and Steel Development, Musa Sada, told the News Agency of Nigeria (NAN). The Nigeria coal industry has four closed non-operational mines of Okpara and Onyeama in Enugu State, Okaba surface mine in Kogi State and Owukpa underground mine in Benue State. “In addition to these there are about 13 undeveloped coalfields,” Business Day reports.“Some industrialists and electricity generating companies in the country are already initiating moves to import coal from South Africa as a proactive measure against the lingering power crisis in the country. The move is believed to be as a result of the frustrations the operators experience in getting gas to fuel their respective power plants, according to experts.“Dangote Cement is leading the coal import initiative from South Africa as the company has placed an initial order of 30,000 t of the commodity from the continent’s second largest economy. The company has already slated $250 million for power generating conversion, which would involve the establishment of three plants at Dangote Cement’s facilities at Obajana in Kogi State; Gboko in Benue State; and Ibeshe in Ogun State.“Even though Nigerian coal is currently in high demand in the international market on account of its low sulphur and moderate ash content, it is still in low supply, leading to the loss of $1 billion annually, information from the Nigerian Bureau of Statistics (NBS) revealed.“The loss is attributed to abandoned coal mines and lack of necessary and modern infrastructure needed to drive the long-neglected sector, which has the export capacity or potential of 15 Mt/y.”Nigeria has experienced and continues to experience severe power outages. This has increased production costs and caused many businesses to close down. Many businesses have resorted to the acquisition of standby generators which has further increased their operating cost thus slowing the growth of the economy.“The recent dip in power supply has been due mainly to inadequate gas supply to thermal power plants,” said the Minister of Power, Chinedu Nebo.Last month, Business Day reported that President (at the time) Olusegun Obasanjo’s government “approved private companies to begin operating coal fields in joint ventures with the Nigeria Coal Corp (NCC), with an eventual goal of completely selling off the NCC’s assets to private investors, but nothing concrete was achieved. In 2013, the federal government signed a Memorandum of Understanding with HTG/Pacific Energy Co, with substantial technical partnership with Chinese experts, for a $3.7 billion coal-to-power project; yet there is nothing to show for it.“Records show that coal occurrences in Nigeria have been identified in more than 22 coalfields spread over 13 States of the federation. And the proven coal reserves in Nigeria is about 639 Mt, while the contingent (sic) reserves sum up to 2,750 Mt.”last_img read more