Coal: Revenue source in need of revitalisation
Ayobami Adedinni is Businessamlive Reporter.
You can contact him on ayobami.adedinni@businessamlive.com with stories and commentary.
Nigerian coal ranks as one of the most bituminous in the world due to low sulphur and ash content and rated environmentally friendly in line with the global campaign on cleaner source of energy in order to reduce the negative impact of climate change.
Coal is a fossil fuel and a non-renewable energy source because it takes millions of years to form and cannot be renewed by men once depleted.
Statistics show that Nige- ria is blessed with about 44 varieties of minerals spread across over 500 locations in the country, but the contribution of the mining sector to the GDP remains at about 0.46 percent.
According to reports, Nigeria’s present coal deposit stands at about 2.8 billion metric tonnes 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.
The mining and production of coal were at its peak in the 1950s, but unfortunately, after the civil war, coal production in Nigeria declined drastically and with the diversion to crude oil, the mining of coal has been removed from the Nigerian natural resources limelight.
The new Roadmap for development launched by Kayode Fayemi, Minister of Mines and Steel Development, last year stated that these key areas had made the Minerals and Mining sector under-performed since 1970.
According to the report, lack of growth of the sector was as a result of poor policy choices, which subsequently became compounded by deterioration in the fiscal regime, infrastructure and shortage of investment in quality geosciences data.
It stated that the Nigeria geosciences challenge continues to constrain investment decision-making.
These constraints include data collection at the appropriate level of accuracy and its timely dissemination to national and international investors.
It noted that there are no large-scale miners in operation in Nigeria today outside the limestone industry, as investors perceive the policy and investment climate to be hostile to business and lack of required infrastructure.
However, it said that regulatory, technical institution, directorate, department, and the agency set up by the ministry have long suffered from poor effectiveness in service delivery, due to insufficient tools, skill, and funding.
It noted that Nigeria mining sector faces a range of important challenges, but that these could be solved if a clear plan is articulated and the challenges are addressed within the right strategic framework.
Experts say that with trillions of naira lying fallow from untapped mineral resources in Nigeria the nation has no business with poverty and deprivation.
The government needs to scale up the level of exploration on minerals considered to be strategic to the economic development of the country.
The financial systems also need immediate strengthen- ing. Mining must be mainstreamed in the MSME programmes.
Capacity building to local banks in evaluating mining projects is also important. The artisanal and small-scale operators should be organized and given extension services, facilitate their access to finance and provide basic infrastructure for their growth.
Short-term strategies should be articulated to add value and beneficiation of mineral products such as gemstone polishing and jewelry making, dimension stone and coal briquettes
The Minister had said: “We have an existential need for power in this country and we have to do something about it, and we can get power from coal, which we have in abundance. We need people from the private sector who will set up plants that will use coal”.
Strategic measures are therefore needed to stimulate economic activities in non-oil sectors. Dependency on oil must cease with focus on creating a non-oil economy that can provide sustainable revenues for the government as well as create more job opportunities.