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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

State

Azagba Lignite field

Delta

Ogboyoga Coal field

Kogi

Ezimo Coal field

Enugu

Lafia-Obi Coal field

Nassarawa

lnyi Coal field

Enugu

Amansiodo

Enugu

Ute

Ondo

Lamla area

Adamawa

Gindi-Akunti

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 Carbon

40-70%

Moisture

8-12%

Volatile Matter

20-30%

Ash Content

5-10%

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 by-products 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