Nigeria loses $1bn annually to unmined coal as demand rises


coalEven 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) has 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 potentials of 15 million tonnes per annum.

‘’The high demand for Nigerian coal is attributed to its low sulphur and moderate ash content. When the necessary infrastructure is put in place and the abandoned mines reactivated and modernised, coal export can yield the nation about US$1 billion per annum,’’ NBS, the country’s data management bureau, said.

Coal is found in commercial quantities in states such as Anambra, Enugu, Ebonyi, Kogi, Benue, Gombe, among others. According to experts, Nigerian coal is also adequate and suitable for use as boiler fuel, high calorific gas, domestic heating, formed coke and in the manufacture of a wide range of chemicals.

Current uses for coal in the country are in cement production, brick factories, foundries, laundries and bakeries, tyre manufacture, battery manufacture, and domestic cooking fuel .  According to Global Menthahe, an online energy research paper, it is projected that as much as 200,000 tonnes of Nigerian coal could be directed to supply coke to the Ajaokuta  Steel Plant per year.

In spite of these domestic needs, analysts say part of what is consumed domestically is still imported, owing to utter neglect of this sector.

‘’The domestic coal market is latently large. Besides the potential for power generation, Nigeria currently imports coals of various grades  and qualities including coke, pellets, briquettes,  anthracite, coking coal and form coke, ‘’ said I.F Odesola, Eneje Samuel and Temilola Olusoga, in a paper entitled ‘’Coal Development in Nigeria: Prospects and Challenges’’ recently presented at  the University of Ibadan.

Following this trend, experts have called on the government to take coal mining business seriously, especially now that the need for economic diversification has become most necessary. They also point at employment generation and creation capacities of coal business as an important potential benefit the nation stands to derive from same.

“There is the need to revitalise coal mines in order to provide employment and diversify the economy now that crude oil is beginning to fail, ‘’ said Chukwunonso Iheoma, economist at African Heritage International.

However, the NBS has said the government has not rested on its roars in its bid to revamp the sector, citing incentives and creation of investment climate as policies geared towards luring investors to coal mining business.

‘’Government is encouraging private investment by offering various incentives including joint venture. The Nigerian Coal Corporation is being reinvigorated and equipped and some of its obsolete equipment replaced, to enhance increased production.

‘’The Federal Government has embarked on formulation of well-articulated policy objectives and programmes, the implementation of which will avail the nation of the enormous opportunities offered by our mineral wealth. The focus of these programmes is the development of the solid mineral sector, with a view to improving its economic importance relative to other sectors of the economy.

They are also designed to facilitate favourable climate for foreign investors in all their ramifications. The creation of the Ministry of Solid Minerals Development and the restoration of the pride of place to the sub-sector is commendable, ‘’NBS said.


[Business Day]