With its discovery in Enugu (1909), coal started to play increasing role in some sectors of Nigeria’s economy, especially transportation and electricity generation. The increased application of coal in railway and power generation which witnessed much progress through the efforts of the Nigerian Coal Corporation, NCC, was expected to continue throughout the 20th and 21st centuries.
But this was not to be. The discovery of crude oil and production of refined products, especially diesel provided an alternative to coal. Consequently, the Nigerian Railway Corporation started to replace its coal burning trains with diesel-powered engines. The Electricity Corporation of Nigeria also started to convert its power generation equipment from coal to diesel and gas.
Available records showed that the nation’s Civil War also impacted negatively on coal production, particularly as many mines were abandoned during the period. Although efforts were made to produce and export coal to the global market through increased private participation in the post Civil War years, the capacity of the nation to produce the product for local and global market has not yet been maximised.
But hope is not lost as the Federal Government has started intensifying efforts to harness more coal for electricity generation in the nation. A few days ago, President Goodluck Jonathan presided over a one-day workshop on the Solid Minerals Sector Development at the Banquet Hall of the Presidential Villa.
He stated that the intention of his administration was to generate 30 per cent of electricity needed in the country from coal. During the event, a Memorandum of Understanding (MoU) on Coal to Power was signed for the development of Ezinmo Coal Block in Enugu and a 1000 megawatts coal power generating plant. The MoU was signed between the Ministry of Mines and Steel Development and HTG-Pacific Energy Consortium for the development of the Ezinmo Coal Bricks.
President Jonathan who disclosed that it is the intention of government to ensure that coal constitutes 30 per cent of the nation’s electricity generation also stated that: “Nigeria is endowed with abundant coal reserve of the required quality necessary for power generation and there is no reason why we should not explore the sector.
He stated that: “I welcome the growing synergy between the ministries of Mines and Steel Development and Power which is made manifest in their collaborative efforts to attract investors to coal fired oil generation opportunities. We expect the co-operations to continue until we get the desired destination in terms of our power needs.”
The Minister of Power, Professor Chinedu Nebo said the MoU was part of the utilisation of the mining licence, granted by the Federal Government for the Ezinmo coal block. He said the licence was granted to an indigenous company with a Chinese partner, HTGPacific Energy Consortium, for the exploitation and mining of the coal block at Ezinmo.
Nebo said Ezinmo was a large coal block which ranged from Enugu State to Benue State. He said beyond mining of the coal block, the company would build 1000 megawatts power plant, which made the agreement, Coal to Power, all the way. The minister said that the Coal to Power plant would be cited in the same location with the mine, specifically, Nsukka, thereby saving the cost of transportation. He said after the signing of the MoU, his Ministry would intensify efforts to ensure that the company gets a Power Purchase Agreement (PPA) that would authorise them to build the coal-fired power plant.
The Chairman of Pacific Energy Consortium, Mr. Adedeji Adeleke, said with the signing of the MoU, the companies would commence exploration immediately. Adeleke said the estimated investments for the developing of the coal mine and the building of the power plant would be about $3.7 billion (about N590 billion).
Other recent happenings indicate coordinated efforts by government which aims towards achieving the 30 per cent coal power generation by 2015. For instance, the Minister of Mines and Steel Development, Mr Musa Mohammed Sada, had constituted a Ministerial Committee headed by the Director General of Mining Cadastre office (MCO) Mr. Mohammed Amate to collate and evaluate the report on coal to power initiatives with a view to establishing the status of the project.
The committee was also to identify assets of the Nigerian Coal Corporation other than coal that had been privatised and identify uses of Nigerian coal in addition to power generation. The committee which submitted its report to the minister on August 6, 2013 proffered in its recommendations, privatisation of all outstanding coal blocks, resolution of all distracting issues that could hinder the transition from a public organisation to a private enterprise, establishment of two coal fired power plants in the first phases to be powered by the Ogboyega, Okaba and Ezimo coals respectively as well as the resuscitation of the Oji River Coal fired plant among others.
Chairman of the committee, Mr. Amate assured that the ministry was working towards achieving the 30 per cent coal power generation by 2015. He said that: “We are even working towards signing a Memorandum of Understanding with a Chinese firm aside the fact that there are other interests. I think it is feasible.”
Consequently, the Bureau of Public Enterprises (BPE), has initiated the process of selling the seven coal blocks currently being managed by the Nigerian Coal Corporation (NCC). The seven blocks are the outstanding from the concession of the coal mines carried out in 2007.
When the sale is completed, electricity generated from the several coal blocks will complement output from the power sector, which reform is nearing completion. Nigeria, according to a 1990 study commissioned by the power ministry, has ample coal reserves of 639 million tons. In a work plan released by the Bureau, the first of the coal blocks to be sold is the Ogwashi- Azagba. The sale process, according to a source, is already at advanced stage. Others to be sold at a later date are the Ezimo, Inyi, Okpara, Amansiodo, and Onyeama coal mines. These five are to be privatised when the Federal Government finalises the report on the coal blocks being carried out by the power and the mines and steel development ministries.
However, the Onwukpa coal block, which is currently under litigation, will be exempted from the privatisation until the various issues are settled. The BPE is also about to dispose the non-core assets of the NCC, including the residential houses, commercial properties and vacant land. The residential houses would be offered to former staff members of the Corporation who are in occupation, while other properties would be sold to the general public.
Federal Government’s efforts at making the coal sector a major contributor to the nation’s electricity requirements began in 1984, when Japanese Support Institute submitted a comprehensive report on coal power. A copy, which is still in the power ministry, reveals that coal deposits in Nigeria can do over 3000mw.
The report was updated during late President Umaru Yar’Adua’s administration, causing a budgetary appropriation of N8.5 billion in 2010 and another N3.9 billion in the 2011 budget. The fund, which was committed into quantifying the country’s coal reserves, enabled the engagement of foreign consultants using geophysical methods to evaluate coal deposits in Enugu and Gombe states.
In the course of the work, eight coal blocks were selected, including five in Enugu – Eyama, Okpara, Eyin, Eziegbo, and Amansiodo, otherwise called Enugu axis lot one. The second lot comprises the three others in Kogi, Benue, and Gombe from which the government is to build three coal fired power plants for electricity. Each of the plants is expected to produce 1000 megawatts.
However, Chief Executive Eta Zuma Group West Africa, Chief Innocent Eta-Zuma who also spoke with National Mirror was pessimistic that government could achieve the 30 per cent power generation without keying into existing power plants. According to him the provision of power using coal can never be an alternative to power generation, but can be used to compliment hydro and gas generated energy.
Speaking on other uses of coal aside power generation, he said, “coal can be used to produce cement by burning clinker which is used for cement production; it can be used for coal briquettes which could be used to replace firewood as well as other industrial purposes. Reacting to the possibility of generating two coal plants by 2015, the coal expert asserted that: “It was not possible, but government can have some processes in place as a lot of planning is required to have an efficient coal mine
He stated that: “For the Federal Government to achieve 30 per cent coal to power by 2015, it will have to key into existing power plants, but if government insists on starting from the scratch, it is impossible to have it by 2015.”
Meanwhile, the statistics of the Ministry of Power puts the nation’ s reserves at about 639 million tons, while inferred reserves are in the region of 2.75 billion tons. As the Ministry puts it: “Nigeria is blessed with abundant deposits of coal spread in 13 states of the federation. Significant commercial quantities abound in the belt spanning Enugu, Benue, Kogi, Nasarawa and Gombe.”
However, Adeleke believes that the Federal Government would soon commence the building of a coal power plant worth $4 billion dollars in Benue State. Adeleke, who expressed this believe during the commissioning of Electric Training Centre in Olorunsogo Power Plant in Ogun State stated that the coal power plant when completed, will generate 120 megawatts of electricity.
Information from National Mirror was used in this report.