The need to revive coal industry in Nigeria

For more than five decades Nigeria has depended solely on crude oil as its major revenue earner; the increasing utilisation of shale gas and other alternative sources of energy by the United States and other advanced oil importing nations of the world as well as the discovery by increasing number of African countries are indications for the country to move faster towards the diversification away from oil as the mainstay of the country’s economy. Although successive leaders have realised this need for diversification, and re-echoed it in their plans over the years, the inactivity especially in the solid mineral sector suggests that government is merely playing lip service to diversification. A typical example is coal which used to be our major source of energy supply before the discovery of oil. Although coal was discovered in Nigeria in 1909, actual exploration started in 1916, when 24,000 tons were produced. Production peaked at near one million tons in 1959, before declining to the present insignificant level.

President Olusegun Obasanjo’s government approved private companies to begin operating coal fields in joint ventures with the Nigeria Coal Corporation (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 Company Limited, 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 million metric tonnes, while the contingent reserves sum up to 2.75 billion metric tonnes. Significant users of coal include alumina refineries, paper manufacturers, and the chemical and pharmaceutical industries. Also, several chemical products can be produced from the by-products of coal. Refined coal tar is used in the manufacture of chemicals, such as creosote oil, naphthalene, phenol, and benzene. Ammonia gas recovered from coke ovens is used to manufacture ammonia salts, nitric acid and agricultural fertilizers. Thousands of different products have coal or coal by-products as components such as soap, aspirins, solvents, dyes, plastics and fibers, such as rayon and nylon.

The five largest coal users are China, USA, India, Russia and Japan and they account for 77 percent of total global coal use. Since 2000, global coal consumption has been growing; in fact, In October 2012 the International Energy Agency noted that coal accounted for half the increased energy use of the prior decade, growing faster than all renewable energy sources

It is on this premise that it is really sad to know that some Nigerian firms are in the process of importing coal from South Africa for power generation because of the frustrations being experienced by them in getting gas to fuel their power plants as a result of the lingering power supply crisis in the country.

We cannot continue to create jobs for other countries that we import resources that are abundant in Nigeria, while unemployment keeps increasing in geometric terms in the country. Similarly, importation of resources that are available here will only drain our foreign exchange. Hence, government needs to facilitate the revival of coal industry in Nigeria by drawing up a road map for coal, monitoring the activities of the companies that secured coal blocs; adhering strictly to set targets, timelines and fast tracking the generation of the geosciences data and mapping of the country as well as aggressively market coal properties.