Solid minerals contributed immensely to the economic development of Nigeria in the pre-independence years. During this period, Nigeria was known for the production of coal as an energy source for electricity, railways and also for export.
Nigerian Coal is one of the most bituminous in the world owing to its low sulphur and ash content and therefore the most environmental friendly, given the need and campaign for cleaner source of energy in the recent past. There are nearly three billion {3,000,000,000} tonnes of indicated reserves in 17 identified coalfields and over 600 million tonnes of proven reserves in Nigeria. Some of the states where coal has been discovered in commercial quantity include Enugu, Benue, Kogi and Plateau States, respectively.
Coal is used as fuel and in industrial production of tar, gas and non edible oils. Arguably the most singular impediment to the attainment of the vision 20:2020 in Nigeria is power{ electricity} because of the direct bearing it has on other economic indicators like unemployment rate and low capacity utilization in the manufacturing sector. Nigeria has against the emphasis on gas for power generation, can tap into the rich coal deposit scattered in different parts of the country to generate electricity.
Nigeria presently generates about three thousand {3000} megawatts of electricity and it has been estimated that it would require at least forty thousand {40,000} megawatts to support her industrial and economic aspiration of being amongst the top twenty {20} economies in the world by the year 2020.
Comparatively, it has been estimated by experts that a coal powered plant would cost one-sixth the cost of powering the plant by gas and due to it use in powering railways, coal mining and processing is highly required.
Given the large deposits of brown coal in the tertiary sediments east and west of River Niger; Nigeria can cash in on foreign investors’ technology to produce coal pellets for industrial use, coal briquettes for domestic use; that is, to replace firewood and fight back desert encroachment and extreme weather conditions in the Northern part of the country.
A grant of a Mining License to a prospective company is subject to proof of economic reserve of the mineral commodity for which a concession is sought. The process involves the company first applying to the Honorable Minister for Certificate of Entry into Mining Industry. The requirements for this include submission of the company’s Certificate of Registration, evidence of technical competence and of financial capability.
The next step is for the company to apply and obtain a prospecting right (PR) to enable it carry out general and scientific prospecting for the categories of minerals within the prospecting right. If properly conducted, work on this right will guide the company towards zeroing into a particular mineral within a specific land area.
The company will then put up application for an exclusive prospecting license (EPL) in the State Mines Office where the mineral is located. This is an exploration license for a particular mineral(s) over a particular land area which, by law, should not exceed 22 square kilometers. Once granted, the area is held exclusively to the company which will now confidently invest in mineral exploration work on the area without hindrance. This license is renewable every one or two years depending on the nature of the terrain.
It is only after the company has satisfied itself of the availability of the mineral in commercial quantity on the EPL that it will apply for grant of a Mining License over the whole or part of the area covered by the EPL.
In the course of all these processes, the law insists that the company employs the services of a “technically competent person” in carrying out the prospecting under the PR, the exploration within the EPL and finally the extraction of the mineral within the mining license area.
Some of the investment incentives in the solid minerals industry in Nigeria include
3-5 years Tax Holiday
Deferred royalty payments
Possible capitalization of expenditure on exploration and surveys
Extension of infrastructure such as roads and electricity to mining sites, and provision of 100% foreign ownership of mining concerns.
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Report Title: SMALL SCALE COAL MINING IN NIGERIA, THE PRE-FEASIBILITY REPORT.
Report Code:FORA/05564-807/2015/COALMININGINNIGERIA/849999-0025
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