With the Federal Government spending a fortune on electricity in the last 10 years without any remarkable improvement, SINA FADARE, who recently visited the Enugu coal mine, reports that the huge deposit of coal in the country could be the solution to the perennial energy crisis, if well exploited.
For many years to come, energy supply in the country will remain an issue on the front burner because of its importance and the neglect and monumental fraud associated with it.
A lot had been spent on power generation by the previous governments in the country, yet power generation stood at 3.959 megawatts as at January 10, 2017. It is a far cry from the 10,000 megawatts the country requires for relative power stability. Three years after privatisation, the sector remains a shadow of what it ought to be. Even getting the little that is generated distributed remains a struggle.
Irked by this abysmal situation, the Speaker of the House of Representatives, Hon. Yakubu Dogara, lamented at a recent stakeholders’ meeting that the Obasanjo and Jonathan administrations alone spent about N 2.7 trillion on electricity between 1999-2015.
Dogara, who could not hide his frustration, said that “the most important question is what happened to the N2.7 trillion spent on the sector. Why is it that the more we spend on the power sector, the more darkness we attract?”
The lawmaker wondered why power generation remained less than 5,000 megawatts after 56 years of the nation’s independence. “Is there a political will to tackle the challenges of the power sector head on?” he queried.
Against the background of this massive failure in the energy sector, equally worried Nigerians are clamouring for the exploitation of the nation’s coal deposits scattered around 13 states of the country but have been neglected for years.
The big question that is begging for answer is whether the nation’s political leadership has the political will to exploit the avalanche of coal deposits. Will the forces behind the poor performance of the energy over the years not constitute a cog in the wheel of coal exploitation? Can the economic reality on ground attract core investors to exploit the natural resources?
The glorious years
Coal was discovered in commercial quantity in Udi, Enugu, around 1909. The development led to the establishment of the Nigerian Coal Corporation (NCC) by the Federal Government in 1950. The sudden wealth from the coal fields gave the state the sobriquet Coal City.
Other major spots were Onyeama, Iva Valley and Okpara mines. Coal produced in these mines generated a lot of revenue for the country between 1916 and 1970. Production reportedly rose from 25,511 tons in 1916 to an estimated 583,422 tons before a decline set in during the Nigerian civil war between 1967 and 1970. Young men who were recruited into the coal mines lived like small gods because they were well paid and enjoyed a lot of economic security. For every enterprising youth in those days, it was a privilege to work in the coal industry because they were paid in pounds.
Confirming the glorious era, Mr. Jude Onogolu, who accompanied this reporter to Onyeama, Iva Valley and Okpara mines, recalled how his father worked and retired as a coal miner in the late 50s. According to him, the coal mines were the glorious era of the economy of the entire South-East.
He said: “As a school boy, it was a privilege to have a miner as a father. I was like a king among my peers. Later, I worked as a clerk in the mine field. On the occasions we went to the field to pay the miners, I saw how the tunnel that leads to Ivy valley was being blown up with dynamite. The miners would then pick pieces of coal in buckets. The number of pieces picked by each miner would be counted and payments would be based on how many pieces they picked.
“In those days, the Egbueti people were very many around here because they were very strong and were mostly used as labourers. The civil war was the beginning of the abandonment of the natural resources. I can authoritatively tell you that the coal deposit we have in this part of the country cannot be exhausted in the next 100 years. You can see it yourself since yesterday that we have been going round.”
Experts are of the view that the hurried privatisation of the mining sector by former President Olusegun Obasanjo signaled the end of the Enugu coal mines as it was obvious that the country was no longer interested in harnessing the abundant gift of nature.
Speaking to our correspondent in Enugu, an octogenarian and former worker at the mine field, Pa Mike Okoroafor, noted with sadness that poor leadership and lack of future plan made the Federal Government to abandon the coal deposit and the massive infrastructure at the mines managed by NCC.
He regretted that the then government did not consult widely before taking the decision which has now not only backfired but will always remain our albatross as a nation because today, electricity is not only unavailable but almost non-existent in our homes. Whereas if the initial tempo had been sustained, nothing less than 1,000 megawatts might have been added to our national grid through coal exploitation.
Okoroafor pointed out that despite the vehement objection of coal workers to the privitisation issue, the union insisted that if the sector would be privatised at all, there should be revival of the sector first and thorough statistical data of the quantum of what the county coal can offer in terms of quantity which may eventually attract investors. But today, what we saw then is now sending investors away and making the exploitation of the mineral resources a pipe dream.
With confidence and sense of belonging, the old veteran miner said while the past mistakes made by the previous governments were painful, if the country fails to return to coal exploitation and make it a top priority now, the nation will be heading towards a national blackout that will compel the government to return to its ‘vomit’ as the only solution to the nation’s energy crisis.
The Nation investigation revealed that coal deposit in Enugu was used to power the Oji River Power Station. The power station served industries like the Premier Cashew Industry in Oghe; the P&T Corporation; the Nigerian Railway Corporation; Niger Gas and Niger Steel.
Today, a visit to Iva Valley, Oji River Power Station, Onyeama Mine, Amansiodo Coal Field, Ezinmo Coal Field and Inyi Coal Field revealed that they have all been abandoned with dilapidated buildings as reminders of the mines in the coal city of Enugu.
A visit also to the operational headquarters of the coal mine, which also served as its major office at No 47, Okpara Avenue, Enugu, showed that it had become a shadow of itself. Apart from the main gate of the building which depicts a coal miner artistically calved on the Iron gate, there was nothing to show that the edifice that once held sway as the economic nerve centre of the old Eastern Region ever existed.
The whole building, according to a source, had been leased to an ITC company, the Galaxy Backbone, a situation that signaled the end of the lofty dream of coal mining in the city.
Untapped treasure
For many years to come, the people of the South-East may not forgive the administration of former President Goodluck Jonathan for reneging on its promise to revive the coal industry during one of ex-president’s campaign rallies in the build-up to the 2011 presidential election.
The administration had earmarked the Enugu and Gombe coal fields for the establishment of two coal-fired power plants which were to generate at least 1,000 megawatts of electricity each.
According to him, under the power sector reforms agenda, the thermal generating plants of the PHCN would be privatised via the sale of a minimum of 51 per cent equity to core investors with established technical and financial ability to operate and expand each plant.
Buttressing the ex-president’s assertion on the expediency of coal exploitation, the former Minister of Mines and Steel Development, Mr. Musa Sada, underscored the government’s resolve to fully exploit the potential of coal during the inauguration of the Nigeria Mining Cadastre Office, Abuja.
Sada, who explained that coal could be used for domestic purpose, particularly in the production of coal briquettes for cooking, said: “Already, coal has been admitted into the nation’s energy mix as it would be used for coal-fire electricity power generating plants.” Unfortunately, the project did not see the light of the day before the exit of Jonathan.
Speaking on the nation’s potential in coal deposits, Mr. Samuel Alabi, a geologist, noted that the country boasts billions of metric tons of coal deposits, adding that it is a better alternative at a time the country is facing serious energy crisis.
According to him, “What the country needs now is to go back to the drawing board and put in place the necessary machinery that can help in exploiting its natural resources.”
Speaking in the same vein, Mr. Jonathan Ikeakor, the Registrar of the Council of Nigeria Mining Engineers and Geo-scientists, said that the crisis bedeviling Nigeria’s energy sector at present could be solved by using coal as an alternative means of generating electricity. Ikeakor noted that the technology for coal power plant is not as complicated as that of gas plant, nuclear power plant or hydro- power plant.
The Registrar pointed out that the use of coal could thrive in the country if government has the political will to give it all it takes to make it a reality. He recalled that Nigeria used to generate power from coal at Orji River in the early 60s as the thermal plant there was generating electricity for the people of the Eastern Region.
“Once you can show investors that you have coal in commercial quantities, they will show interest. Coal should be contributing significantly an appreciable percentage of our energy mix in Nigeria sooner than later,” he explained.
The Commissioner of Commerce and Industry in Enugu State, Barrister Sam Ogbu-Nwodo, who spoke with the reporter in his office, explained that one of the topmost priorities of the state government is the exploitation of coal in the state. He however regretted that since mining is the exclusive right of the Federal Government, the state is handicapped in its bid to turn around the fortunes of the sector for the benefit of the people of the state.
Ogbu-Nwodo, who believes there is still a ray of hope in that direction, noted that “energy is the key to industrialisation. We move from the known to the unknown. The known reality is coal. We have used it in the past. Coal used to sustain the economic nerve of this region in the days of old. We had one of the few coal generated plants that supplied the Eastern Region electricity.
“The state government is ready to collaborate and give maximum support to any investor sent by the Federal Ministry of Solid Minerals. The only one that showed interest recently, the state has gone all out to assist in the area of community inter-relationship and security. We are ready to do more if we see any genuine investor so that the state can be urgently returned to the lost glory of coal exploitation.”
The commissioner, who said the state was looking in the direction of Public Private Partnership (PPP) in driving the economic potential of the state, pointed out that “anytime coal comes out again in the state, it is going to drive the economy of the entire South East. This form of energy will drastically reduce the cost of production and attract more industries, which in turn will create employment opportunities.”
Ogbu-Nwodo also noted that the coal from the state is the smokeless type which is good for domestic consumption. “We are partnering with a company that is ready to produce coal briquettes which can be used for cooking, especially at a time like this when kerosene is no longer within the reach of the common man.”
Lending credence to the potential and importance of coal to energy generation, a consultant on rural energy and National Coordinator of Green Shield Organisation, Dr. Kabir Abudulkadri, noted that coal was the engine room of the industrial revolution in Nigeria in the early 1950s.
According to him, coal energy is very efficient and billions of metric tons are deposited in the ground, which he said cannot be exhausted in the next 300 years.
“We have one of the best coals in the world. It is smokeless. It can be made clean if it is carbonised through simple technology. The coal in Enugu was carbonised and we domesticated it for local use,” he said.
With nostalgia, Abudulkadri, who went down memory lane, explained: “My organisation went to Enugu and saw the technology of using coal briquette with fabricated local stove. I took a sample to Kano and sold the idea to the former Emir of Kano, Alhaji Ado Bayero, and I was told to make it available to the 44 local government areas in Kano State.
“Each local government gave me N150,000. Instead of returning to Enugu to duplicate it, I went to Technical College, Malari and asked if they could produce the prototype that I brought, and the response was positive. I went back to the board of my organisation and they gave me the go ahead to mass-produce it.
“We were able to produce about 200 for each of the 44 local government areas as experiment. It was very useful and simple to handle for the rural women who saw it as the end to their suffering, going far into the bush to look for firewood. Coal briquette can be made in any shape. It is potable and easier to use.”
He regretted that Nigeria is in the midst of plenty yet suffering due to poor foresight.
”The problem of rural energy has continued to persist due to abandoning coal exploitation. We find out that it is cost effective to exploit coal and find it safer after carbonisation. If it is used in the rural area, it will discourage deforestation,” he added.
International conspiracy
Perhaps disturbed by the poor power generation in the country, the Minister of Finance, Mrs. Kemi Adeosun, expressed disappointment over what she described as a move by some multinational institutions and western countries to block coal-to-power projects in the country.
The minister, who made her feelings known at a conference in Washington DC in October, last year, described the multinational institutions and their western backers as hypocrites for denying Nigeria and other African countries the opportunity to use coal to generate electricity.
Speaking during a panel session titled: “Towards Better Infrastructure in Developing Countries”, Adeosun said: “I am going to point fingers at multinational institutions and the West (for double standard). A good example is the coal-fired power plants. In Nigeria, we have coal but we have power problem, yet we’ve been blocked because it is not green.
“It is hypocrisy because we have the entire western industrialisation built on coal energy; that is the competitive advantage that they have been using. Now, Africa wants to use coal and suddenly they are saying, ‘Oh, you have to use solar and wind (renewable energy), which are the most expensive, after polluting the environment for hundreds of years. Now that Africa wants to use coal, they deny us.”
Adeosun, who regretted that there was no level playing ground when African countries are involved, added: “We need policy consistency to attract bankable projects. We also need macro-economic stability. If you want to phase out coal, no problem. But those who started it should lead. Those who want us to stop using dirty fuel should stop it first before telling us not to use it.
“By telling us not to use coal, they are pushing us into the destructive cycle of underdevelopment. While you have competitive advantage, you tie our hands behind us.”
If the Minister of Finance was disturbed by the hypocrisy of the western world, Mr. Leo Okonkwo, a geologist and consultant on coal mining, was bitter about the roles the western world and their collaborators, the multinational institutions, have been playing for many years “so that our coal will remain inside the soil.”
Okonkwo noted that each time the issue of exploiting our coal arises, they begin a campaign about climate change, green environment and a host of others in order to discourage our government and the would-be technical partner who might show interest. Whereas most of the notable countries in the world, particularly China and USA, are still using coal to generate energy and heaven does not fall.”
He regretted that this was possible because of lack of political will by subsequent governments in the country who could have embarked on the exploitation of our coal and damn the consequences.
“Do you know the millions of dollars which Dangote is using to import coal from Australia to power some of his plants for electricity? Such a country will not pray for Nigeria to get her bearing in the area of coal exploitation and will do everything to frustrate such a plan.”
Okonkwo said that coal mining and the use of it could only thrive in the country if the government gives it the priority attention it deserves. We have the quantity of coal that can last us nothing less than the next 200 years. Let the government wake up and bail us out from this poor energy supply,” he said.
The Nation investigation revealed that coal provides about 30 per cent of global primary energy needs, generates over 40 per cent of the world’s electricity and is used in the production of 70 per cent of the world’s steel.
According to the World Economy Forum 2016 report, the top 10 countries that are using coal to generate electricity are China- 3,785 metric tons; USA-1,643 metric tons; India-801 metric tons; Japan-303 metric tons; Germany-287 metric tons; South Africa-239 metric tons; Korea-239 metric tons; Australia- 171 metric tons; Russian Federation-169 metric tons and United Kingdom-144 metric tons.
Hindrances to coal mining
The CADASTRE office, Abuja, which is in charge of issuing licences to prospective investors, was a beehive of activities as various investors trooped to the place on a daily basis.
A source at The Presidency said that when President Mohammadu Buhari took over from Jonathan, exploitation of solid minerals was one of his priorities. Therefore, a lot of investors who had been issued licences but could not make anything out of it had their licences revoked through an advert published in a national newspaper on February 26, 2016.
Against this background, only 18 companies were issued licences to exploit coal in the country. Unfortunately out of the 18, it was only one that surfaced in Enugu State for serious business. But the company was equally handicapped because of poor statistics and data on the volume, quality and location of this mineral resource.
The Nation investigation revealed that the only clog in the wheel of coal exploitation in the country was the failure of the past administrations to conduct the 3D seismic study which will assist the investor to know the volume of the coal deposit, the quality and the location.
A senior director at CADASTRE office, Abuja, who spoke to The Nation on condition of anonymity, said a huge sum had been budgeted for the study, but it went down the drain due to massive corruption.
The source further explained that N923 million was budgeted for the study in 2012, N1.7 billion in 2013 and another N1.1 billion in 2014, but there was nothing on the ground for investors to work on. “Therefore, the banks are very skeptical to finance such a project. This is our dilemma,” he said.
According to him, ”The study was meant to get the net quantity that will help in planning by the Federal Government as well as investors. But unfortunately, the money went down the drain and the study is still in the limbo.”
But how did the country find herself at this crossroads?
Okonkwo, who has been in the mining industry in the last 10 years, said that a lot of things ought to have been put in place by the Federal Government “before licences were issued to every Tom, Dick and Harry who does not know what it entails.”
According to him, “There is no investor who will gamble his money on a project he does not have any reliable data on. The 3D seismic study is key to coal mining and only the Federal Government can do this. An investor will take the report to the bank to secure a loan. Otherwise, we are just dancing on the same spot.”
Okonkwo explained that the similar study was done on bitumen in Ondo State and the Federal Government spent billions of naira before the 10 wells mapped out for exploration were discovered.
“This gave reliable data about the mineral deposit, and that was when it was discovered that Nigeria is the second largest producer of bitumen after Canada. Such a comprehensive study is required if the government is serious about exploiting coal,” he said.
The Nation investigation revealed that majority of the banks in the country are ignorant of what is going on in the mining industry, not to talk of giving loan for such projects. This assertion was buttressed by the Minister of Mines and Steel Development, Dr. Kayode Fayemi, at a conference titled: ‘Nigeria beyond oil’, where he asserted that banks do not understand mining business.
Fayemi, who said that only one per cent of the loans on offer in the banking sector goes to mining, regretted that “our banking industry does not understand mining at all. Apart from the Bank of Industry (BoI) that has now started some work in this regard, only two banks in the country have mining desks, Stanbic IBTC and First City Monument Bank (FCMB).
“I had to go to the Bankers’ Committee to talk to the entire bank managing directors, courtesy of the Central Bank of Nigeria (CBN) governor, to encourage them to set up mining desks in their banks.”
The minister, who gave a ray of hope about the sector, said although the mining of coal has been with us since 1902, we lost the opportunity when all the expatriates left. ”But following some reforms, which started in 1999, which essentially crystalised around the Nigeria Mining and Mineral Act 2007, Nigeria is once again on the path to providing a transparent and workable regulatory and policy environment for more robust private-sector-led mining,” he said.
In his recent tour of some mining sites in the country, the minister said there were numerous requests for coal sites by many business concerns, “but the Federal Government’s main priority for now is how to use its coal to aid power generation in the country.
“The ministry would give priority to committed power companies as far as coal sites are concerned. We want to package our coal for use in power generation. We will give coal sites to serious-minded power companies,” Fayemi said.
The minister, who stressed the importance of power to the development of the critical sector of the economy, said the ministry, in collaboration with the Ministry of Power, Works and Housing, would encourage power companies with demonstrated commitment to secure coal sites to boost power generation.
Way out
Okonkwo pointed out that if in the 21st Century, Nigeria which prides herself as the giant of Africa could only produce less than 5,000 megawatts of electricity and leaves about two billion metric tons of coal inside buried in the soil unexploited, the shame is on all.
According to him, the Buhari administration should go all out to cross all the huddles and make sure that coal is exploited no matter the challenges. “If we can solve the problem of electricity, more than 70 per cent of the country’s problems would be solved. The time to act is now,” he argued.
In his own view, Dr. Abudulkadri explained that from the little action taken by his organisation on coal many years ago, which turned into success, energy is the only key to unlock the industrial revolution of the country.
“If we exploit all the coal deposits we have in all the 13 states of the country, there will be relative power stability. Not that alone, provision of rural energy, either for domestic use or for cottage industry, will provide massive employment opportunities.
“The government has to inject a lot of funds into it. During the period of our experimentation, which turned into a huge success, former President Olusegun Obasanjo was thrilled and took a bold step by approving for us N500 million to start the project. Unfortunately, bureaucratic bottleneck from the ministries truncated the lofty deal,” he lamented.
