|
AshakaCem N5.5 Billion Coal investment in Gombe State By Bakura M. Bajoga
The Nigeria coal corporation is the body that regulates coal exploration in Nigeria. The corporation was established in 1950 and it is 100% owned by the Federal Government of Nigeria.
Coal exploration in Nigeria started as far back as 1916. Available data shows that coal (mainly bituminous cooking coal) is available in more than 22 coal fields spread over 13 states in Nigeria. The proven coal reserves are about 639 million metric tones while the inferred reserves were about 2.7 billion metric tones.
The Nigeria coal industry has four closed, non-optional mines in Okpara and Onyeama in Enugu State, Okaba surface in Kogi State and Owukpa underground in Benue State. In addition to these there are about 13 undeveloped Coalfields.
The developed coalfields in Nigeria were the virgin coalfields where further detailed exploration work and access roads are required, and the developing coalfields where reserves have been proven and more access roads are developed.
Emphasis of the Federal Government on solid minerals development has necessitated the creation of the Ministry of solid minerals development in 1995. The Ministry is charged with the enormous task of ensuring a rapid but orderly development of the hitherto neglected, but richly abundant solid minerals resources in Nigeria.
The Ministry of Solid Mineral Development and its parestatals have redefined government’s role in coal mining under what it called “product sharing joint venture” arrangement. Under this venture, the Nigeria Coal corporation shall sign agreement with a private company which is to undertake at its own risk and expense, general survey, exploration and feasibility studies where these have not been done by the government, for the exploration of coal potentials Within a delineated area of the country’s coal reserves for an agreed term under a coal mining sublease title. The Company will also subsequently develop the mine to commence coal production within an agreed period.
Companies involved in coal mining activity are encouraged by government to involve the local communities by the way of offering some percentage of their engagements, especially labour so as to avoid disruption of operations of the company due to community social stress.
In Nigeria, coal is presently used as our energy fuel in brick factories, foundries, laundry and brickets industries. Other factories for which it forms an important raw material base are in tyre and battery manufacture as well as substitute for fuel wood in domestic cooking. And will be used in cement production when AshakaCem Plc starts coal burning.
There are 3 types of coal according to experts thus, bituminous, sub-bituminous and lignite. Lignite is the youngest, and it is what was discovered in Maiganga village of Gombe state.
AshakaCem Plc is the largest cement producer in northern Nigeria and has been operating continuously since 1979. Its factory in Gombe State is able to produce 850,000 tons of cement a year. This company is currently up rating its kiln for capacity increase from 850,000 tons to 1,070,000 tons per annum.
Ashaka Cem Plc as a responsible corporate citizen is fully aware that Nigerian coal is suitable as energy fuel for firing the kiln. It has an installed coal capacity utilization of 300,000 tons per annum and a prospect of expanding current capacity utilization after the up rating project in the company.
It is the objective of AshakaCem plant that lignite will represent 90% of its fuel requirements at 3000tpd of clinker after initial capacity increase, which is expected to bring down the price per Gigajoules (GJ) to 2.15 or 2.7 Euro per GJ from present 7.00 Euro per GJ. AshakaCem will secure fuel supply of at least 25 years in order to avoid Production short falls, fuel shortage in 2005 lead to two weeks kiln stoppage with subsequent losses estimated at1.83 million euros in variable contributions. The usage of coal as alternative fuel will also leverage risk of fuel price increases.
In its quest to switch over to lignite usage, the company has finished exploration within selected area in Maiganga in Akko Local Government of Gombe State with an estimated proven reserve of 4.5 million tons. This reserve is expected to satisfy the Company’s requirement for more than 25 years. An additional 2 million tons reserve will be further investigated within its exploratory license (of 143 cadastral units), and this will be enough to develop a power plant.
The Ministry of solid minerals development respectively approves the mining and exploratory licenses within 153 and 30 cadastral units for 21 years with effect from May 2006.
So far land assessment was completed by the Gombe State Ministry of Lands and survey and compensation was made to the landowners according to Government rate. AshakaCem on its part has paid a matching bonus as it used to do in any compensation exercise.
According to the assessment conducted, the lignite project will cost AshakaCem Plc N5.5 billion (34.2 million Euros).
AshakaCem Plc, as part of its social responsibility will undertake the complete resettlement of Maiganga village and 3 other hamlets, and provide infrastructures such as construction of 14 kilometers of Feeder Road up to Sambo Daji the District headquarter, 3 Bridges and about 20 culverts. Other amenities include the building of a primary school, mosque, a church, dispensary and boreholes for the affected communities.
Another interesting aspect of this venture is the invitation of experts from France and South Africa to join Ashaka team to commence field studies for the open up of Box - cut, thus providing job opportunities to community youth before commencement of real mining. Safety has high priority in Lafarge and Ashaka, and also very important in mining law. Some percentage of the labour force will go to the affected communities. Working with the experts is also a fulfillment of requirements by the mining law.
Ashaka’s plan regarding the lignite project in 2007 is to open employment opportunity especially to the Local Community at least 60% of the labour. Proper mining will commence in October 2007 and lignite burning to start by January 2008 at its factory site.
For interested investors
in coal and other mineral resources, they will need this brief background
about Gombe State, "Jewel in the Savannah," which was created on 1st
October 1996 by the General Sani Abacha administration. Its creation was a
fulfillment of the aspirations of the people, who for long, had been
yearning for a state of their own out of the then Bauchi State. The
genesis of the struggle dates back to 1979. It lies within the Northeast region of Nigeria and occupies a total land area of about 20,265sq. Km. the state had, by 1998, an estimated population of 1,820,415 inhabitants. In conclusion we want to assure all that Nigeria coal is generally characterized by low sulphur medium to high calorific value, low ash and low moisture contents and therefore is environmentally friendly. Coals are therefore in great exports demand and are most suitable for bounding purposes especially with high sulphur content coals. Presently the aggregate Nigeria coal potential demands stand at about 15 million metric tones annually.
Big time coal investors are therefore invited to emulate the Ashaka example to satisfy this potential coal export market in Gombe State in particular and Nigeria as a whole.
Dan’amar Funakaye |