Small Scale Coal Mining In Nigeria, The Pre-Feasibility Report

Coal has been used as an energy resource, primarily burned for the production of electricity and/or heat, and is also used for industrial purposes, such as refining metals. A fossil fuel, coal forms when dead plant matter is converted into peat, which in turn is converted into lignite, then sub-bituminous coal, after that bituminous coal, and lastly anthracite. This involves biological and geological processes that take place over a long period.

Coal is the largest source of energy for the generation of electricity worldwide, as well as one of the largest worldwide anthropogenic sources of carbon dioxide releases. In 2011, world gross emissions from coal usage were 14,416 million tonnes. Coal-fired electric power generation emits around 2,000 pounds of carbon dioxide for every megawatt-hour generated, which is almost double the approximately 1100 pounds of carbon dioxide released by a natural gas-fired electric plant per megawatt-hour generated.

Because of this higher carbon efficiency of natural gas generation, as the market in the United States has changed to reduce coal and increase natural gas generation, carbon dioxide emissions have fallen. Those measured in the first quarter of 2012 were the lowest of any recorded for the first quarter of any year since 1992. In 2013, the head of the UN climate agency advised that most of the world’s coal reserves should be left in the ground to avoid catastrophic global warming.

Access to modern energy services not only contributes to economic growth and household incomes but also to the improved quality of life that comes with better education and health services. All sources of energy will be needed to meet future energy demand, including coal.

Coal has many important uses worldwide. The most significant uses of coal are in electricity generation, steel production, cement manufacturing and as a liquid fuel. Around 6.6 billion tonnes of hard coal were used worldwide last year and 1 billion tonnes of brown coal.

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 67% of global coal consumption; 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.

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 fertilisers. Thousands of different products have coal or coal by-products as components: soap, aspirins, solvents, dyes, plastics and fibres, such as rayon and nylon. Coal is also an essential ingredient in the production of specialist products:

The high demand for Nigerian coal is attributed to its low sulphur and moderate ash content. When the necessary infrastructure is put in place and the abandoned mines reactivated and modernised, coal export can yield the nation about US$1 billion per annum.

Coal is found in commercial quantities in states such as Anambra, Enugu, Ebonyi, Kogi, Benue, Gombe, among others. According to experts, Nigerian coal is also adequate and suitable for use as boiler fuel, high calorific gas, domestic heating, formed coke and in the manufacture of a wide range of chemicals.

Current uses for coal in the country are in cement production, brick factories, foundries, laundries and bakeries, tyre manufacture, battery manufacture, and domestic cooking fuel .

Table of Contents

EXECUTIVE SUMMARY 1. Business Overview 1.1 Description of the Business 1.2 Incentives / Government Policy 1.3 How to Obtain a Mining Lease in Nigeria 1.4 Occurrence and Distribution of the mineral in Nigeria 1.4 Critical Success Factor of the Business 1.5 Description of the Business Industry 1.6 Contribution to Local and National Economy 2. Marketing Plan 2.1 Description of product 2.2 Location 2.3 The Opportunity 2.4 Pricing Strategy 2.5 Target Market 2.6 Distribution and Delivery Strategy 2.7 Promotional Strategy 2.8 Competition 3. Technical Analysis 3.1 Description of the Location 3.2 Raw Materials 3.3 Production Technology / Equipment 3.4 Production Process 3.5 Production Cost 3.6 Stock Control Process 3.7 Pre-Operating activities and expenses 3.7.1 Operating Activities and Expenses 3.8 Project Implentation Schedule 4.0 Organizational and Management Plan 4.1 Ownership of the business 4.2 Profile of the promoters 4.3 Key Management Staff 4.3.1 Strategic Business Units 4.3.2 Management Support Units 4.4 Details of salary schedule 5. Financial Plan 5.1 Financial Assumption 5.2 Start up Capital Estimation 5.3 Source of Capital 5.4 Security of Loan 5.5 Loan Repayment Plan 5.6 Profit and Loss Analysis 5.7 Cashflow Analysis 5.8 Viability Analysis 6.0 Business Risk and Mitigation Factor 6.1 Business Risks 6.2 SWOT Analysis

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