The move by some industrialists and electricity generating companies to import coal from South Africa to augment industrial power generation is understandable in view of the lingering poor power supply situation in the country, hampering industrial productivity and job creation. Although the resort to coal importation may be an interim measure to sustain industrial production, it may become the new craze except the authorities address the power issue with substantial attention paid to Nigeria’s own coal deposits.
Importing coal from South Africa or elsewhere, for that matter, underscores the unfortunate contradictions of Nigeria. Just as the country is a major crude oil producer but relies heavily on imported oil products, joining the league of coal importing countries is most unfortunate when the nation’s coal resources remain largely unexploited. Such mismanagement and poor attention to issues of national development planning is lamentable.
The electricity generating companies spearheading this initiative, are in the throes of epileptic power supply that not only hampers their operation but also seriously escalates the cost of production. Indeed, one of them is bemoaning the daily expenditure of N250 million on diesel alone to power its industrial plants, an enormous cost to pay and a disincentive to industrialisation. Gas shortage to fire industrial plants has also pushed such companies to seek alternative sources of energy. While Nigeria is blessed with the largest gas reserves in the world, parlous supply infrastructure and vandalism have compromised distribution.
According to reports, Dangote Cement Plc, for example, has already placed order for an initial 30,000 tonnes of coal from South Africa. The company has also slated $250 million to power its facilities at Obajana in Kogi State; Gboko in Benue State and Ibeshe in Ogun State. These industrial facilities, if fully operational, would provide thousands of jobs.
The company disclosed that the 30,000 tonnes of coal would power 60 megawatts plants, with another 30 megawatts generating facility on standby. It explained that the coal importation agenda was a temporary measure to forestall system collapse in their operations.
It is unfortunate that there is no respite in gas supply despite all the measures instituted by the government to leverage the product. No country relies on one source of power but, unfortunately, this is the bane of electricity production in Nigeria.
For decades, Nigeria has relied mainly on hydropower and gas thermal stations for electricity generation while at the same time, the facilities have been grossly mismanaged. The three main dams at Kainji, Jebba and Shiroro operate below installed capacity. The Kainji Dam, which was built in 1968 to generate 760 megawatts of electricity, generates less than 450 megawatts due to poor maintenance, and none of the dams has lived up to expectation.
Political intrigues, militancy, vandalism and poor priority setting by government have combined to frustrate the gas-to-power initiative under the power reform programme. Consequently, all the independent power plants (IPPs) projects across the country hardly function due to lack of gas supply. So, the time to diversify is now.
It is remarkable that major industrialists like Dangote have realised the importance of coal as alternative source of energy. This development just might reawaken interest in coal development in the country. So, emphasis should be on developing Nigeria’s coal with fears of mining and pollution taken care of by technology. There are large deposits of coal in Enugu, Gombe and Kogi/Benue axis. Coking coal is also found in the Lafia-Obi bituminous complex. The proven coal reserve in the country is put at 639 million tonnes with another 2.75 billion tonnes inferred reserve. This huge resource base needs to be exploited to boost power generation.
Interestingly, the Federal Government has already allocated coal-mining blocks to prospective miners, but full exploitation is yet to commence as unnecessary bureaucratic bottleneck delays action. The Government reportedly signed a Memorandum of Understanding (MoU), with HTG/Pacific Energy Company Limited, with technical partnership with Chinese experts, for a $3.7 billion coal-to-power project, which is still awaiting execution. The project is designed to power a 1,200 megawatts plant to be built at Enugu, using coal from the Ezima mine. These plans need to be implemented, and Nigerian industrialists should play a leading role by investing in local coal development. They should look beyond short-term benefits and instead invest on long-term basis to guarantee continued and uninterrupted production.
No doubt, the onus is on the government to provide the right environment for such commitment, with policies geared towards the national interest. The coal industry was abandoned decades ago, but the time to revamp it is now.
