A TERM PAPER ON COAL PRODUCTION, MARKET AND OPPORTUNITIES IN NIGERIA BY OYETIMEIN OLUWATOBI C.

MME/07/0643 OF DEPARTMENT OF METALLURGICAL AND MATERIALS ENGINEERING, FEDERAL UNIVERSITY OF TECHNOLOGY, AKURE. IN PARTIAL FULFILLMENT OF CONTINUOUS ASSESSMENT FOR THE COURSE ON FUELS, FURNACES AND REFRACTORIES (MME312) SUBMITTED TO DR. I.O. OGUNNNIYI

JUNE, 2011.

TABLE OF CONTENTS Title Page Table of Contents Introduction 1.0. COAL DEPOSITS IN NIGERIA: LOCATION AND HISTORY 1.1. LOCATION OF THE COAL DEPOSITS 1.1.1. KOGI DISTRICT 1.1.2. BENUE DISTRICT 1.1.3. ENUGU DISTRICT 1.2. HISTORY OF COAL MINING IN NIGERIA 1.3. CURRENT MINING ACTIVITIES IN NIGERIA 2.0. COMPOSITION AND RANK OF NIGERIAN COAL 2.1. MARKET SITUATIONS IN COAL TRADING: LOCAL AND GLOBAL REFERENCES

INTRODUCTION Coal, a combustible organic rock composed primarily of carbon, hydrogen, and oxygen. It is an important source of chemicals used to make medicine, fertilizers, pesticides, and other products. Coal comes from ancient plants buried over millions of years in Earths crust, its outermost layer. Coal, petroleum, natural gas, and oil shale are all known as fossil fuels because they come from the remains of ancient life buried deep in the crust. Coal is rich in hydrocarbons (compounds made up of the elements hydrogen and carbon). All life forms contain hydrocarbons, and in general, material that contains hydrocarbons is called organic material. Coal originally formed from ancient plants that died, decomposed, and were buried under layers of sediment during the Carboniferous Period, about 360 million to 290 million years ago. As more and more layers of sediment formed over this decomposed plant material, the overburden exerted increasing heat and weight on the organic matter. Over millions of years, these physical conditions caused coal to form from the carbon, hydrogen, oxygen, nitrogen, sulfur, and inorganic mineral compounds in the plant matter. The coal formed in layers known as seams. Plant matter changes into coal in stages. In each successive stage, higher pressure and heat from the accumulating overburden increase the carbon content of the plant matter and drive out more of its moisture content. Scientists classify coal according to its fixed carbon content, or the amount of carbon the coal produces when heated under controlled conditions. Higher grades of coal have higher fixed carbon content. (Speight J, 2009). In Nigeria, Lignite and sub-bituminous coal can be found in southeastern Nigeria. Coal exploration in Nigeria started as far back as 1916. Available data show that Coal (mainly sub-bituminous steam Coals except for the Lafia-Obi bituminous Coking Coal) occurrences in Nigeria have been indicated in more than 22 Coalfields spread over 13 States of the Federation. The proven coal reserves so far in Nigeria total about 639 million metric tones while the inferred reserves sum up to 2.75 billion metric tones. (Ministry of Mines and Steel Development Journal, 2008). The aim of this paper is to share in simple language the locations, rank mining history and current activities being done on these abundant reserves. I also aim to point out the existing market and opportunities inherent in exploiting these fallow reserves which the authorities seem not to notice.

CHAPTER ONE COAL DEPOSITS IN NIGERIA: LOCATION AND HISTORY Coal is a sedimentary rock formed from plants that flourished millions of years ago when tropical swamps covered large areas of the world. Lush vegetation, such as early club mosses, horsetails, and enormous ferns, thrived in these swamps. Generations of this vegetation died and settled to the swamp bottom, and over time the organic material lost oxygen and hydrogen, leaving the material with a high percentage of carbon. Layers of mud and sand accumulated over the decomposed plant matter, compressing and hardening the organic material as the sediments deepened. Over millions of years, deepening sediment layers, known as overburden, exerted tremendous heat and pressure on the underlying plant matter, which eventually became coal. Nigeria covers an area of 923,768 sq km (356,669 sq mi). At its greatest expanse, it measures about 1,200 km (about 750 mi) from east to west and about 1,050 km (about 650 mi) from north to south. Nigeria is bounded by Cameroon to the east, Chad to the northeast, Niger to the north, Benin to the west, and the Gulf of Guinea on the Atlantic Ocean to the south. Inland from the southeastern coast are progressively higher regions. In some areas, such as the Udi Hills northwest of Enugu, escarpments have been formed by dipping rock strata. Farther east, along Nigerias border with Cameroon, lie the eastern highlands, made of several distinct ranges and plateaus, including the Mandara Mountains, the Shebeshi Mountains, the Alantika Mountains, and the Mambila Mountains. In the Shebeshi is Dimlang (Vogel Peak), which at 2,042 m (6,699 ft) is Nigerias highest point. 1.1. LOCATION OF THE COAL DEPOSITS The Anambra Basin, located in south-eastern Nigeria, appears to contain the largest and most economically viable coal resources. The basin covers an area of approximately 1.5 million hectares and is constrained by the Niger River on the west, the Benue River on the north and the Enugu Escarpment on the east. The coal is predominantly in one seam that outcrops along the eastern side of the basin at the base of the Enugu Escarpment and dips gently towards the centre of the basin. Little is currently known about the coal resource potential on the western side of the basin along the east bank of the Niger River. However, coal outcroppings have been reported at Idah and Dekina on the north-western side of the basin.

Fig. 1 ANAMBRA COAL BASIN

Exploration within the basin is limited but there are four small coal mines in the eastern outcrops of the basin north-west of the city of Enugu and two smaller mines further north. In addition, shallow drill holes have been drilled to depths of 335 metres or less. Not all of these holes penetrated the main coal horizon. Only minor structural faults have been identified. Where the seam has been intercepted by drilling, the potentially mineable coal ranges in thickness from less than one metre to over 3.6 metres. A number of coal sections along the eastern outcrop have also been measured but in general these resources have not been sufficiently explored to define the potential proven reserves. A study by Behre Dolbear & Company (USA), Inc. has subdivided the Anambra Coal Basin into seven coal mining districts, focusing on three that have been explored to a greater degree than the others. These have been defined as the Kogi, Benue (Orukpa-Ezimo) and Enugu Coal Districts. Each of these districts has two or more defined coal resource areas. 1.1.1. Kogi District The Kogi Coal District, covering 225,000 hectares of the Anambra Coal Basin, lies on the northeastern side of the basin. Two areas within the district have been explored to a limited degree.

The more northern of the two areas, Ogboyoga, has the greatest amount of available drill data, where 27 holes have been drilled and cored and 15 separate measurements have been taken of outcrops of the main coal seam in stream drainages. Behre Dolbear used the guidelines of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (also known as the JORC Code) to delineate a total of 123 million metric tonnes of coal underling an estimated 8,900 hectares. An additional 165 million tonnes of coal classed as non-reportable resource by the JORC Code definitions, is projected to lie in Ogboyoga area. The coal thickness in this area is approximately two metres. The other area of interest is Okaba, the site of a small idle surface mine. Near Okaba, 17 core holes have been drilled, all of which intersected the main coal stream. No outcrop samples have been reported for this area. A total of 100 million tonnes of demonstrated coal (JORC) have been estimated to underlie 2,770 hectares in the Okaba area and an additional 435 million tonnes of non-reportable coal resource are projected to the west of existing drilling. In total the Kogi District is estimated to have a demonstrated coal resource of 223 million tonnes averaging 3.6 metres thick, which underlies 8,900 hectares (4%) of the district. The total non-reportable resources by JORC Code are 600 million tonnes. 1.1.2. Benue District The Benue Coal District, covering 175,000 hectares of the coal basin, is immediately south of the Kogi District along the eastern outcrop of the Anambra Basin. It also has two areas of interest. The more northern of the two, Orukpa, includes a small idle surface mine and a total of 11 drill holes. Six coal outcroppings have also been measured in streams in the area. Based on this data, Behre Dolbear estimates that a reportable coal resource of 81 million tonnes (demonstrated JORC) exists along the outcrop. Another 117 million tonnes of non-reportable coal, as defined by the JORC Code, is projected to exist west of the existing drilling. The average coal thickness is 3.1 metres. Immediately south of the Orukpa area is the Ezimo area. This area has limited exploration, with only four drill holes penetrating the main coal stream. Ten coal outcroppings have also been measured, not all of which have exposed the entire seam. Based upon this limited data, a total of 43 million tonnes of demonstrated coal resource have been projected for the Ezimo area. An additional 263 million tonnes of non-reportable coal resource is projected to exist west of the

existing drilling. The average coal thickness in this area is also 3.1 metres. In total the Benue District (Orukpa-Ezimo) is estimated to have a demonstrated coal resource of 124 million tonnes, which underlies 4,700 hectares (3%) of the district. The total non-reportable resources, as defined in accordance with the JORC Code, are 380 million tonnes. 1.1.3. Enugu District The Enugu Coal District, covering 270,000 hectares of the coal basin, is centred on Enugu City, south of the Benue District. It has supported the largest amount of commercial mining in the past. In addition to two underground mines, there are a total of 36 drill holes drilled in the area. Previous studies have estimated the demonstrated coal resource to be 49 million averaging 2.2 metres thick. An additional 111 million non-reportable of in place coal are inferred to exist west of the old mine workings.

1.2. HISTORY OF COAL MINING IN NIGERIA Coal exploration in Nigeria started as far back as 1916. Available data show that Coal (mainly sub-bituminous steam Coals except for the Lafia-Obi bituminous Coking Coal) occurrences in Nigeria have been indicated in more than 22 Coalfields spread over 13 States of the Federation. The proven Coal reserves so far in Nigeria total about 639 million metric tones whilethe inferred reserves sum up to 2.75 billion metric tones. Presently, the Nigeria Coal Industry has 4 existing mines, Okpara and Onyeama Underground Mines in Enugu state, Aba surface mine in Kogi State and Owukpa Underground Mine in Benue State In addition, there are more than 13 undeveloped Coal fields.

The undeveloped Coal fields in Nigeria are of two categories, viz: the Virgin Coal fields where further detailed exploration work and/or access roadways are required and the developing Coalfields where reserves have been proven and Mine access road ways developed. Like other parts of the world, coal is the oldest commercial fuel, dating in Nigeria from 1916 when 24,000 tons were produced. Production peaked at near one million tons in 1959, before declining to the present insignificant level. This is due to the reduction in the demand for coal arising from dieselization of rail transportation, and switching from coal to gas for thermal power generation.

1.3.CURRENT MINING ACTIVITIES IN NIGERIA Nigeria's coal reserves are large, over 2 billion metric tonnes, of which 650 mil- lion tonnes are proven. If fully revitalized, the coal industry could fetch up to 5 billion Naira in export earnings. Coal production is from the Cretaceous Anambra Basin which extends to Dekina in the northern part of the basin in Benue State and to Okigwe in the south. The coal in this basin is subbituminous and occurs principally at two levels, the lower coal measures (Mamu Formation) and the upper coal measures (Nsukka Formation). From north to south, the reserves from seams over one meter thick, are (in million tonnes); Ogboyoga (100), Okaba (70), Orukpa (60), Ezimo (50), and Enugu (50) (FRN, 1987). Coal seams also occur at Gombe in Gombe State. Mine production capacities after full rehabilitation and privatization could attain the following levels: Onyeama and Okpara (150,000-400,000 tonnes/year), Owukpa (2,500 tonnes/year) and Okaba (15,000-300,000 tonnes/ year).

CHAPTER TWO COMPOSITION AND RANK OF NIGERIAN COAL

Lignite (brown coal) and sub-bituminous coal (coal of a lower grade than bituminous but of a higher grade than lignite) can be found in southeastern Nigeria. Nigerian sub-bituminous coal has a high calorific value (5,000-6,000 cal/g or 5500-6500 air dried), low ash and low sulfur contents, with good storage characteristics (Afonja, 1979). The coal in the Niger basin is subbituminous. The domestic coal market is latently large. Besides the potential for power generation, Nigeria currently imports coals of various grades and qualities. Nigerian coal has been found suitable for boiler fuel, production of high calorific gas, domestic heating, briquettes, formed coke and the manufacture of a wide range of chemicals including waxes, resins, adhesives and dyes. Their characteristic properties (low sulphur and ash content and low thermoplastic properties), make these sub-bituminous coals ideal for coal-fired electric plants. Some Nigerian coals can be used to produce formed-coke of metallurgical quality. 2.1. MARKET SITUATIONS IN COAL TRADING: LOCAL AND GLOBAL The proven Coal reserves so far in Nigeria total about 639 million metric tones while the inferred reserves sum up to 2.75 billion metric tonnes. The government has recently placed a high priority on utilizing these resources to increase Nigerias electricity generating capacity. Nigerias goal is to revitalize the coal mining industry and expand power generation by attracting companies to develop these large coal resources and construct coal-fired generating plants that will connect to the countrys electrical distribution grid. There is also significant potential domestic demand for coal briquettes to replace wood for cooking and heating. In the Lafia-Obi area of Nassarawa State, good quality coking coal has been discovered which is suitable for use in the iron and steel industry. If utilized, the Lafia-Obi coal would save the country the high cost of importing cokable coal. Since the Nigerian Coal Corporation has lost nearly all its traditional customers, notably railways and power authority, a recent drive to market its coal overseas offered some hope of recovery.

European buyers in Italy and the United Kingdom have started importing Nigerian coal, because its low sulfur content is environmentally acceptable. As already noted, Nigeria has the largest lignite deposit in Africa, with reserves of about 50 million tonnes. The Nigerian lignite belt, of mid-Tertiary age, extends from Oriu in the south-east, through Urnuezeala, Umuahia, Nnewi, Oba, in a 20 to 40km - wide belt across the Niger, to Ogwashi, Asaba, Mgbiigliba and AdiaseUti in Delta State. It has not yet been exploited. Nigeria currently imports coals of various grades and qualities. There is also the potential for coal exports to countries such as China, Israel, Japan, Ghana, United States, Europe and India. Resources are an estimate of the worlds total coal deposits, regardless of whether the deposits are commercially accessible. Exploration geologists have found and mapped the worlds most extensive coal beds. At the beginning of 2001, global coal reserves were estimated at 984.2 billion metric tons, in which 1 metric ton equals 1,016 kg (2,240 lb). These reserves occurred in the following regions by order of importance: the Asia Pacific, including Australia, 29.7 percent; North America, 26.1 percent; Russia and the countries of the former Union of Soviet Socialist Republics (USSR), 23.4 percent; Europe, excluding the former USSR, 12.4 percent; Africa and the Middle East, 6.2 percent; and South and Central America, 2.2 percent.

REFERENCES James Speight, Microsoft Encarta 2009. 1993-2008 Microsoft Corporation. All rights reserved. Ministry of Mines and Steel Development Journal, 2008 Robert Stock, Microsoft Encarta 2009. 1993-2008 Microsoft Corporation. All rights reserved. www.howwemadeitinafrica.com. Nigerias Coal Deposits Identified (July, 2010). www.onlinenigeria.com. Coal and Lignite (June, 2011)