Nigeria’s Industrial Coal export market “a massive Goldmine for Today’s
Investors
Coal is a combustible black or brownish-black sedimentary rock normally
occurring in rock strata in layers or veins called coal beds or coal seams. The
harder forms, such as anthracite coal, can be regarded as metamorphic rock
because of later exposure to elevated temperature and pressure. Coal is composed
primarily of carbon along with variable quantities of other elements, chiefly
hydrogen, with smaller quantities of sulfur, oxygen and nitrogen
Occurrence: Coal begins as layers of plant matter accumulating at the bottom of a
body of water. For the process to continue, the plant matter must be protected from
biodegradation and oxidization, usually by mud or acidic water.
Locations: 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. 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. The developing coal fields in Nigeria are stated in the table
below.
Locations
Azagba Lignite
field
Ogboyoga Coal
field
Ezimo Coal field
Lafia-Obi Coal
field
lnyi Coal field
Amansiodo
Ute
Lamla area
Gindi-Akunti
State
Delta
Kogi
Enugu
Nassarawa
Enugu
Enugu
Ondo
Adamawa
Plateau
Afuze
Bauchi
Janata-Koji
Kwara
Okpara Mine
Enugu
Specifications: The coal specification varies depending on the requirement of the
buyer and this could vary base ranges stated in table below.
Features
Percentage
Fixed
40-70%
Carbon
Moisture
8-12%
Volatile
20-30%
Matter
Ash
5-10%
Content
Sulphur
0.2-0.8%
Size
30-100mm
Uses: Coal has many important uses worldwide. The most significant uses are in
electricity generation, steel production, cement manufacturing and as a liquid fuel.
Around 6.1 billion tonnes of hard coal were used worldwide in 2010 and 1 billion
tonnes of brown coal. Since 2000, global coal consumption has grown faster than
any other fuel.
Different types of coal have different uses. Steam coal - also known as thermal
coal - is mainly used in power generation. Coking coal - also known as
metallurgical coal - is mainly used in steel production.
The biggest market for coal is Asia, which currently accounts for over 65% of
global coal consumption; although China is responsible for a significant proportion
of this. Many countries do not have natural energy resources sufficient to cover
their energy needs, and therefore need to import energy to help meet their
requirements.
Other important users of coal include alumina refineries, paper manufacturers, and
the chemical and pharmaceutical industries. 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 byproducts as components: soap, aspirins, solvents, dyes, plastics and fibers, such as
rayon and nylon. Coal is also an essential ingredient in the production of specialist
products:
·
·
Activated carbon - used in filters for water and air purification and in kidney
dialysis machines.
·
Carbon fiber - an extremely strong but light weight reinforcement material
used in construction, mountain bikes and tennis rackets.
·
Silicon metal - used to produce silicones and silanes, which are in turn used
to make lubricants, water repellents, resins, cosmetics, hair shampoos and
toothpastes.
Export market: The five largest coal users - China, USA, India, Russia and Japan
- account for 77% of total global coal use. Japan, Chinese Taipei and Korea, for
example, import significant quantities of steam coal for electricity generation and
coking coal for steel production
Export Price: Depending on the carbon content of the Coal the FOB price could
vary from USD100-250/MT.
Local price: The local market price of Coal at the loading point could vary from
NGN5,000-NGN7,000/MT or more.
How you can be part of the whole process: You will need to register your
company as a limited liability company; you must also have an export licence to
export Nigeria coal to the foreign Countries. You can then register with some of
the trade sites which will enable you to get buyers regularly.
Opportunity for small investors: As a small investors, you can also register with
some of the trade sites like Alibaba Tradekey and son you can go ahead an invite
any of the buyers to Nigeria, but you will need to have concluded arrangement
with the owner of the coal site in Nigeria, you commission may runs to million of
naira.. Internet savvy Nigerians can you their experience to get a good Coal
contract and sell to interested exporters in Nigeria, you are entitled to 15 to 20%
commission depending on your bargaining power.
Please remember, preparing for the world of international trade is a complex
process. But with the proper knowledge and strategy, you’ll soon be on your way
to world wide success.
Tunji Afuwape
Small business and SME finance expert
Tel: 08033224392
e-mail:info@21stplacelive.com