Nigeria Coal

Incept has identified a thermal coal operation meeting its selection criteria in the Kogi State of Nigeria, Africa.

A joint venture agreement has been signed through an Incept subsidiary which gives Incept supermajority ownership of Barjalex Nig Ltd, an African company that owns a coal exploration license.
Incept has identified a high value thermal coal production in the Kogi State of Nigeria, Africa, which has been acquired with a resource estimate of 32 million tonnes of thermal coal, with growth potential by acquisition to 800 million tonnes. The exploration license has been issued. Incept is also begun the process of acquiring additional sites in the Anambra Coal Basin to extend its coal properties in Nigeria to 500 million tonnes before the end of 2012.

The primary thermal coal deposits occur at the base of the Enugu Escarpment in the Kogi District of the Anambra Coal Basin. This area has been the site of previous mining operations, and Incept is focusing on expanding previously discovered mineral deposits.
Past geological and technical work conducted by Nigeria Geological Survey and Behr Dolbear America within the Kogi Coalfield revealed coal deposits that are mineable at open cast method with coal thickness ranging from 2.5 to 3 metres.
During the reconnaissance exercise conducted on the sites identified coal outcrops, a coal thickness of up to 1.8 metres was revealed and there has been a hypothetical reserve estimate in excess of 500 million tonnes within the identified sites.
The Kogi Coal District, comprises of the Okaba and Ogboyoga coal properties. It covers proximately 225,000 hectares and is located on the northeastern flank of the Anambra Basin, Nigeria’s most economically viable coal region covering approximately 1.5 million hectares.

Prospect Area in the Kogi State of Nigeria

The coal seam, designated the No. 3 Coal Horizon, outcrops along the eastern flank of the Anambra Basin at the foot of an escarpment with a slight dip to the southwest and appears to be continuous between Ogboyoga and Okaba.
The coal seam near the outcrop can be mined by surface mining, but most of the resources in this district should be mineable by highly productive longwall methods.

History and Current Status

Nigeria is located in West Africa with where coal was first discovered in 1909 near Udi in central eastern Nigeria. In 1950, the Nigerian Coal Corporation (NCC) was formed and given the responsibility for exploration, development and mining the coal resources, which is 100% owned by the Nigerian Federal Government.
However, the coal business in Nigeria was abandoned in the 1960s for petroleum. The NCC operated two underground mines, Okpara and Onyeama, and two surface mines, Orukpa and Okaba, located on the eastern edge of the Anambra Coal Basin. It’s mining peak was reach in 1959 at 905,397 tonnes per year. However, by the 1990’s, production was less than 100,000 tonnes per year.
As a result of the decline, the NCC recently tried to enter joint ventures in order to exploit the available coal field resources. Nigeria estimates its coal reserves at more than 2 billion tonnes, with approximately 650 million tonnes as proven. Currently, Nigeria ranks low in worldwide coal production, with less than 10 thousand tonnes of coal production in 2007.
The NCC had the exclusive rights to mine coal in Nigeria until 1999, when the Federal Government of Nigeria established a policy and legislation that de -regulated mineral exploration and exploitation. This opened up the sector to private industry participation and resulted in NCC entering into joint ventures on an equity participation basis. The privatization effort is ongoing.

Ogboyoga has the greatest amount of available drill data, where 27 holes have been drilled and cored and 15 separate measurements have been taken of outcrops of the main coal seam in stream drainages.
Behre Dolbear used the JORC Code to delineate a total of 123 million metric tonnes of coal (demonstrated) underlying an estimated 8,900 hectares. An additional 165 million tonnes of coal classed as non-reportable resource by the JORC Code definitions, is projected to lie in the Ogboyoga area.

The other area of interest is Okaba. Near Okaba 17 core holes have been drilled, all of which intersected the main coal seam. A total of 100 million tonnes of demonstrated coal (JORC) have been estimated to underlie 2,770 hectares in the Okaba area and an additional 435 million tonnes of non-reportable coal resource are projected to the west of existing drilling. In total the Kogi Coal District is estimated to have a demonstrated coal resource of 223 million tonnes. The total non-reportable resources by JORC Code are 600 million tonnes.


Coal is mined using two techniques: surface mining which is sometimes referred to as open cast mining, and underground or deep mining. The most appropriate mining technique is largely determined by the geology of the coal deposit. Once raw coal is mined, it is often crushed, sized and washed in processing plants where the product consistency and energy content of the coal is improved. Washing is a process where the denser mineral matter in coal is separated from the main carbon rich component of coal.
In 2010, global thermal coal production totalled 4.6 billion tonnes, with China being the largest thermal coal producer globally, accounting for approximately 47% of global thermal coal production, followed by the U.S. and Australia. The majority of thermal coal produced is consumed in the country of production due to its relatively widespread availability and high transportation costs relative to its energy value and price.
Thermal coal, which is also the type of coal mined here is used in electricity generation and other energy-raising processes, represented approximately 85 per cent of the 5.4 billion tonnes of total global coal production in 2010. Metallurgical coal (which refers to all coals used in the steel industry, including ‘‘coking coal’’ used to produce coke and PCI (Pulverised Coal Injection) coals which are injected into the base of a blast furnace to make iron), accounts for most of the balance of production.
Of the limited export volumes, the vast majority is seaborne coal. The two major seaborne thermal coal markets are the Atlantic region and the Asia-Pacific region. European countries and the U.S. are the key importers of thermal coal in the Atlantic region with the key suppliers being South Africa, Russia and Colombia. In the Asia-Pacific region, the key importers are Japan, South Korea, China and Taiwan and the key exporters are Indonesia and Australia. For some time Australia has been the largest coal exporter globally along with the U.S., Indonesia, Russia, South Africa and China. However, increasing domestic electricity demand in the latter country has resulted in stronger domestic consumption, with China becoming a net coal importer in 2009. India is rapidly becoming an important coal importer receiving coal from both South African and Asia-Pacific suppliers.
Unit ocean freight costs are a significant component of the price of seaborne export coal and coke. Participants in the coal and coke seaborne export markets either own vessels or lease freight on a ‘‘spot charter’’ or ‘‘time charter’’ basis. According to the shipping brokers Simpson Spence and Young, in 2010, the global seaborne dry bulk trade across all commodities was 3.3 billion tonnes, of which 0.9 billion tonnes was thermal and coking coal; a further 1 billion tonnes was iron ore. The global seaborne dry bulk trade is forecast to increase to 4.5 billion tonnes by 2015 across all commodities.
Global coal demand is subject to a number of drivers, including primary energy consumption, the decommissioning and construction of new coal-fired power plants, the competitiveness of coal versus alternative energy sources and the regulatory environment, including carbon emission constraints in several countries. Increasing imports into China and India reflect their increasing demand, primarily due to increased electricity and steel production, as well as the higher quality of internationally-traded coals compared to India’s and China’s own domestic production. According to Merlin, in 2010, China was the largest consumer of thermal coal globally, accounting for almost half of total consumption.
Thermal coal is sold under term contracts or on the spot market. It is priced primarily on calorific value and sulphur content. Seaborne coal prices in each market normally fluctuate with changes in supply and demand, production and transportation costs, availability and prices of substitute fuels, general economic conditions, government regulation and weather. Price settlement between Asian power companies and Australian coal producers have typically acted as benchmarks for pricing in the Asia-Pacific coal market and have been used as a reference point in the Atlantic market.
There are four future exchanges where internationally-traded coal qualities are traded: in Chicago, the CME; in Singapore, SGX and in London, ICE and LCH. However, a majority of coal trading is conducted off-exchange through brokers operating bilateral contracts and through the API swap market, which has trading volumes that exceed the physical underlying market.
In terms of Nigerian coal, it has been found suitable for boiler fuel, production of high calorific gas, domestic heating, briquettes, formed coke and the manufacture of a wide range of chemicals including waxes, resins, adhesives and dyes. Their characteristic properties (low sulphur and ash content and low thermoplastic properties), make these sub-bituminous coals ideal for coal-fired electric power plants. Some Nigerian coals can be used to produce formed-coke of metallurgical quality. Besides the potential for power generation, Nigeria currently imports coals of various grades and qualities including coke, pellets, briquettes, anthracite, coking coal and form coke. There is also the potential for coal exports to countries such as China, Israel, Japan, Ghana, the U.S., Europe and India.
Incept has a demand focus and partners with strategically located mines and businesses to service the robust resource demand from the world’s major urbanisation growth markets, China, East Asia, Middle East and India. The company is strategically positioned to capitalise on delivering efficiencies from the steel making process, a high demand sector in both these markets. As 2011, India and China together account for 53% of global steel use. Going forward, it is expected that the demand for steel will be strong and continue to grow in India with both expected to produce approximately 500kgs of steel per person by 2015.
There is clearly a role to be played by future coal-fired electric power generation facilities. If power becomes available and the population becomes more accustomed to modern conveniences, the “KW per household” factors will increase, further expanding the demand for electrical power. Even by conservative measures, the country appears ready to absorb the output from 10,000 MW to 15,000 MW of additional generation capacity during the next 20 to 25 years. However, one of the major deficiencies in Nigeria’s electrical power system is the transmission and distribution systems. This electrical transmission and distribution is not adequate and before significant generating capacity is added it must be supported by reliable transmission and distribution systems. The Government of Nigeria is focusing efforts to improve these systems.


Nigeria does not have adequate electrical power generation capacity to supply the electrical requirements of the nation. In order to provide the electrical demand, the Government of Nigeria has recognized the need to develop coal-fired power plants and revitalize Nigeria’s coal mining industry to provide fuel for power generation. In addition, large quantities of trees are harvested each year for domestic heating and cooking causing severe deforestation problems in some parts of Nigeria. The Government of Nigeria is promoting the development of coal briquettes to replace wood for domestic heating and cooking. Under a grant from the United States Trade and Development Agency (USTDA), Nigeria’s Ministry of Solid Minerals Development has undertaken a Feasibility Study (Study) to determine the potential of revitalizing the coal industry to supply coal for these two potential markets.
As Nigeria has major coal resources that have not been well explored or exploited, the government has recently placed a high priority on utilizing those resources to increase its electrical generating capacity. Nigeria’s goal is to revitalize the coal mining industry and expand power generation by attracting foreign companies to develop these large coal resources and construct coal-fired generating plants that will connect to Nigeria’s electrical distribution grid. There is also a significant potential in domestic demand for coal briquettes to replace wood for cooking and for domestic and industrial heating to replace wood. The use of wood for domestic heating and cooling by the growing population is causing increasingly rapid deforestation in many parts of Nigeria.
Nigeria has major underexplored and underexploited high quality coal resources with the Nigerian government is focusing on revitalizing the coal mining industry. The benefit of this technology is the black-brown coal price differential as well as the savings in black coal import cost into developing countries, ie. mine to power station. Stage of Development

Significant mineralisation has been established at three locations in the Kogi Coal District.
The primary thermal coal deposits occur at the base of the Enugu Escarpment in the Kogi District of the Anambra Coal Basin. This area has been the site of previous mining operations, and Incept is focusing on expanding previously discovered mineral deposits.
Due to the significance of the mineralisation defined in previous studies as indicated before, and their proximity to the Ogboyoga and Okaba coal fields of the Kogi Coal District, the company has commenced the development studies for 3 projects.

  • Barjalex 1 – 4km2
  • Barjalex 2 – 6.4km2
  • Barjalex Extension Lease – 16.6km2

Core drilling program for the Barjalex extension has been drawn to feature five zones (Zone 1-4) of drilling. This is meant to increase the level of confidence of the coal resource to being a proven reserve through measurement from 500m drilling spacing. Pre-drilling campaign on this site has been planned and executed.

Overview of Lease 10047

The geological study of the Barjalex properties supplements past background studies on the Ogboyoga coal field which was done by the British in 1950s and reviewed by Behr Dolbear in 2007.
Three areas were carefully investigated through remote sensing and field work for ground truthing. The areas included the Barjalex 1 and 2 sites and the area to which the work is extended. Coal was found outcropping in six different places within the studied area. The coal outcrops were encountered at elevation range of 265 metres and 295 metres above sea level.
There also exists a highly prospective suite of other exploration assets in the area. The map below illustrates part of the coal resource of Anambra coal basin showing the existing Barjalex Coal property and the extension. Five prospective areas have been carved out and taken to the Nigeria Mining Cadastre office where the sites are confirmed opened for prospective applicants. Apart from the areas carved out for Incept, four other sites still within same coal fields have been identified as areas that can be acquired from the present holders of the sites. All these sites have been worked out to produce a hypothetical coal resource above 500 million tonnes (these are to be Incept Coal properties). Exploration Licence applications have been completed and filed for the four sites. Incept through her partner company has applied for Ministerial Grants for exploration for six of the sites (14140, 14141, 14142, 14143, 14144 and 14057EL). These grants give the go ahead on exploration work on the sites and subsequent application for Mining Leases following successful exploration activities. The charges for the grant have already been paid, while those relating to the Exploration License Certificates are pending. The table below shows detail of the six concessions.

S/No License Type Licence Number Size Location Assigned Entity
1. Ministerial Grant for Exploration 14140 11 km2


Omala, Kogi Shebuel International Ltd
2. Ministerial Grant for Exploration – yet to be granted 14141 33.6 km2 Omala, Kogi Shebuel International Ltd
3. Ministerial Grant for Exploration 14142 18.2 km2 Omala, Kogi Shebuel International Ltd
4. Exploration License Certificate 14143 26 km2 Omala, Kogi Shebuel International Ltd
5. Exploration License Certificate 14144 14.4 km2 Omala, Kogi Shebuel International Ltd

Coal Concession located within the Coal Resources map

The coal sites form part of the Ogboyoga coalfield of the Kogi Coal District where detail coal exploration and drilling have reported great prospect of coal toward the western side of the studied location. The coal sites are hosted within Omala, Dekina and Bassa Local Government are of Kogi state. The sites’ proximity to the prominent River Niger and River Benue make them great prospect for power generation. Transportation of the coal to port in Port Harcourt can be achieved through the dredged river.
Two coal outcrops were already encountered in these areas and there is indication that most of the coal deposit within the areas will be mined as open cast. Detail geological work is required to prove this further. Satellite map and DEM would be acquired to model the terrain. The application for Exploration License over designated areas is in progress.

Area A (14141EL)
Is an Area covered is about 33.6km2 and is about 3km from the existing Barjalex coal site. A massive coal outcrop was encountered within the area. Host community leaders are ready to give the area out to serious investors. Area is very viable to increase Barjalex coal resource to the targeted 100 million tonnes.

Area B-E (14140, 14142, 14143, and 14144EL)
These areas were discovered opened for acquisition in the Mining Cadastre office during the course of checking the availability of Area ‘A’. Areas have been superimposed on Nigeria Coal Resource map and were confirmed sitting on the lower coal measure along with the Barjalex New extension and the Area ‘A’ coal site. Site number 14057EL (3.2 km2) is another area southeast of Okaba coalfields. This area has also been applied for and to be acquired by Incept.
Areas covered by these sites totals to over 72.8 km2.
Both sites have easy pathway to ownership and negotiable cost of acquisition.

Site EL Number Hypothetical Resource Estimate (million tonnes) Total Cost (includes cost of application and letter of consent acquisition)
A 14141EL 90.5 USD 31,645
B 14143EL 79.8 USD 31,645
C 14144EL 37.1 USD 31,645
D 14140EL 30.9 USD 31,645
E 14142EL 51.15 USD 31,645
Total   289.45 USD 158,225

Extension to Other Areas
There is also the potential to extend to another 6 sites. Sites F – K have been covered by other companies and are interested in transferring them to interested investors. Four of the sites have been estimated with the five areas to be acquired for Incept to give a hypothetical reserve estimate of over 500 million tonnes.

The resources estimates of sites F-K are detailed below.

Site EL Number Hypothetical Resource Estimate (million tonnes)
F 14152EL 59.59
G 14154EL 70.83
H 14155EL 37.1
I 14492EL 45.53
Total   213.05


Coal Outcrops List

Coal Outcrops Village Easting


Northing (Y) Elevation (m) Coal Thickness (m) Exposure Length (m) Coal Outcrop Photos
COC 1 Odelle 355364.47 848305.85 264 1 50  
COC 2 Odelle 355702.42 849063.97 298 1.2 56  
COC 3 Odelle 355828.76 849552.53 299 1 70  
COC 4 Odelle 355500.26 851102.46 259 0.8 50  
COC 5 Odelle 354961.15 850891.87 267 1.3 60 Picture unavailable
COC 6 Manejo 354489.44 850032.67 272 2 120  
COC 7 Manejo 352897.4 850091.64 267 1.6 80  
COC 8 Manejo 352686.81 850024.25 265 1.2 120  
COC 9 Manejo 352594.15 849923.17 264 1.5 100  
COC 10 Mantjo 351372.74 850251.69 266 2.5 100  
COC 11 Oti No.3 354456.33 852647.11 255 0.94 120  

Map of Coal Outcrops with Low Coal Measure

Market Size and Growth

Coal is the most widely available and well-distributed fossil fuel in the world and is the second largest primary source of energy after crude oil in consumption terms, and the largest in terms of reserves. Global consumption of coal is forecast to increase significantly between 2010 and 2020.
The NCC had previously held exclusive rights to mine coal in Nigeria until 1999, when the Federal Government of Nigeria established a policy and legislation that de-regulated mineral exploration and exploitation. This opened up the sector to private industry participation and resulted in NCC entering into joint ventures on an equity participation basis. The privatization effort is still going on.
The Nigerian Government has decided that it is in Nigeria’s best interest to revitalize the coal industry through privatization of the industry. Therefore, it is offering several coal concessions to companies that have expertise in developing and operating coal mines and marketing coal, and/or developing and operating coal fired power plants, to explore and develop the coal resources of Nigeria.
Incept believes that the best approach of delineating additional deposits is to target greater depths than previous exploration programs. Previous development on these Nigeria sites comprised shallow drilling. Given the comparatively strong cost/benefit return of extracting oil, together with the prevailing metal prices making deeper exploration uneconomical, therefore did not target deeper deposits. These limitations have left many prospects underexplored at depth. Additional targets may be generated based on geophysical techniques.
As for political and regulatory concerns, all restrictions regarding limits to foreign shareholding in Nigerian business and enterprises were abolished in 1995. Accordingly, a foreign investor may invest and participate in the operation of any enterprise in Nigeria with no specific restrictions.


From a geopolitical perspective, all restrictions regarding limits to foreign shareholding in Nigerian business and enterprises were abolished in 1995. Accordingly, a foreign investor may invest and participate in the operation of any enterprise in Nigeria with no specific restrictions. A foreign corporation seeking to conduct business in Nigeria is required to obtain local incorporation of the Nigerian branch or subsidiary, to be registered with the Registrar-General of the Corporate Affairs Commission (Registrar of Companies).
In terms of putting coal development in Nigeria into an environmental perspective, environmental awareness has been rather slow to develop, but such awareness has gathered momentum since the 1970s. Environmental impacts of the oil industry have also generated some discontent and social unrest, and have sensitized the government and people of Nigeria to the environmental and social impacts, both positive and negative, of development projects.
To address these impacts in Nigeria, one important directive is the Environmental Impact Assessment (EIA) Act No. 86 of 1992, which requires that such an assessment, termed an EIA, to be carried out before all major development projects, including mining. The Act designates the Federal Environmental Protection Agency (now Federal Ministry of Environment – FME) as the enforcing authority. The Ministry has drawn up a set of EIA Sectoral Guidelines (FEPA 1995) for mining, beneficiation, and metallurgical processes. Numerous other environmental laws and regulations would address new coal mine and power plant projects or renewed activities at existing mines in Nigeria including requiring prospectors to attain an 80% restoration of the land.
In terms of trends relating to power generating capacity, like many state-owned enterprises, the National Electric Power Authority (NEPA) had suffered from severe under funding and under capitalization, inappropriate capital structure, excessive executive interference, and sub optimal decision-making and planning. The results were a huge discrepancy in the power distribution sub sector, a poorly motivated workforce, and a lack of maintenance of existing plant and infrastructure. The percentage of functional generating capacity versus non-functional generating capacity has varied widely and the true generating capacity of facilities connected to the national grid has fluctuated significantly over the past 20 years.

Target Market

The mined coal will be largely sold to international parties, however, there is increasing domestic demand for coal. Incept intends to leverage on Nigeria’s current environment where electricity is largely non-existent. Nigeria has over 160 million people, the required energy consumption has been estimated to be over 120,000 MW, however, at present Nigeria can only supplies 3,500 MW. Nigeria is also changing from hydro power generation to coal fired power plants.
There is also intention to use the Nigerian coal for development of T-Steel.


The operating environment for private sector investment into Nigera has become more attractive over the past few years, with the following infrastructure and incentives readily available:

  • 100% repatriation of profits
  • Provisions for 100% foreign ownership of mining concerns and power generation plants
  • Infrastructure including road links, railways, deep ocean terminal, and jetties
  • Export Processing Zones and Free Trading Zones
  • A national electric power grid
  • Local markets for industrial commodities
  • An existing Stock Exchange
  • Fixed and mobile communication systems
  • Several private and state owned airlines with daily flights between major cities
  • Existing formats for joint venture and production sharing contracts

The Nigerian Government has decided that it is in Nigeria’s best interest to revitalize the coal industry through privatization of the industry. Therefore, it is offering several coal concessions to companies that have expertise in developing and operating coal mines and marketing coal, and/or developing and operating coal fired power plants, to explore and develop the coal resources of Nigeria.

Operations Plan

Incept’s strategy is long term view for the district and the company is prepared to systematically drill to previous unexplored depths to discover large deposits as suggested by the survey information.
The exploration drilling program for detail resource calculation of the Barjalex coal property is divided into two phases in accordance with JORC drill point spacing for indicated reserve estimation and ultimately to achieve the proven reserve estimate of the coal deposit. In all sixty boreholes have been mapped out to be drilled under the two phases.

Phase I
This preliminary drilling program is targeted toward increasing the level of the geological confidence of the near inferred coal resource of Barjalex site to a measured resource category or an indicated reserve. Four zones (zone 1-4) accommodating eleven boreholes (BH 01-BH 11) have been strategically mapped out for drilling with drilling space ranging from 700m to 1500m. This phase of drilling will provide important information needed to make adjustment and establish drilling points for the Phase II of the Exploration Program.

The table below shows the coordinate data on each selected point and proposed depth of drilling.

Zones S/No Borehole Number (BH)                       GSP Coordinates Estimated Drilling Depth  

Cost @ 465 USD/m


Longitude (x) Latitude (y) Digital Elevation (m)
BJ-Z1 1. BH 01       07° 39′ 11″    07° 41′ 58″ 270 25m 11,625
2. BH 02       07° 39′ 11″    07° 41′ 21″ 275 30m 13,950
3. BH 03       07° 39′ 45″    07° 41′ 19″ 270 25m 11,625
BJ-Z2 4. BH 04       07° 40′ 05″    07° 41′ 17″ 270 25m 11,625
5. BH 05       07° 40′ 03″    07° 41′ 58″ 285 40m 18,600
6. BH 08       07° 40′ 51″    07° 41′ 30″ 270 25m 11,625
BJ-Z3 7. BH 06       07° 40′ 45″    07° 41′ 56″ 280 35m 16,275
8. BH 07       07° 41′ 09″    07° 41′ 49″ 260 20m 9,300
9. BH 08       07° 40′ 51″    07° 41′ 30″ 270 25m 11,625
BJ-Z4 10. BH 09       07° 41′ 20″    07° 41′ 22″ 300 55m 25,575
11. BH 10       07° 41′ 38″    07° 41′ 05″ 290 50m 23,250
12. BH 11       07° 41′ 26″    07° 40′ 44″ 290 50m 23,250
TOTAL 405m 179,025

Cost of the first phase of exploratory drilling Barjalex site for 10 days is estimated at USD 216,675. Target is put at 40m drill per day.

Phase II
This phase of drilling will be geared towards delineating the extent and continuity of any potentially economic coal deposits detected by the wide-spaced boreholes from Phase 1.The proposed drilling program in this phase of exploration is designed to bring coal resources in the area up to the status of proven reserve. The level of confidence in reported coal is a direct function of the density of drilling for a given area and sampling technique applied which allows physical examination of the coal. Sixty four holes at an average spacing of 500m have been mapped out to accomplish the purpose of this drilling.

The table below shows the coordinate data on each selected point and proposed depth of drilling.



1 07° 39′ 45″ 07° 42′ 00″ 320 65 30,225
2 07°39’30″/07°39’38” 07°41’45″/07°41’30” 260/275 20 9,300
3 07° 39′ 55″ 07° 41′ 45″ 255 10 4,650
4 07° 40′ 08″ 07° 42′ 00″ 280 35 16,275
5 07° 39′ 45″ 07° 41′ 15″ 265 20 9,300
6 07° 40′ 00″ 07° 41′ 30″ 270 25 11,625
7 07° 40′ 15″ 07° 41′ 45″ 305 55 25,575
8 07° 40′ 08″ 07° 41′ 15″ 320 65 30,225
9 07° 41′ 23″ 07° 41′ 30″ 330 80 37,200
10 07° 40′ 38″ 07° 41′ 45″ 275 30 13,950
11 07° 40′ 53″ 07° 42′ 00″ 290 45 20,925
12 07° 40′ 30″ 07° 41′ 15″ 320 65 30,225
61 07° 39′ 00″ 07° 41′ 15″ 305 55 25,575
62 07° 39′ 14″ 07° 41′ 30″ 265 20 9,300
63 07° 39′ 30″ 07° 41′ 45″ 260 20 9,300
64 07° 39′ 45″ 07° 42′ 00″ 265 20 9,300


13 07° 40′ 45″ 07° 41′ 30″ 300 55 25,575
14 07° 40′ 52″ 07° 41′ 15″ 275 30 13,950
15 07° 41′ 07″ 07° 41′ 30″ 275 30 13,950
16 07° 41′ 24″ 07° 41′ 15″ 265 25 11,625
17 07° 41′ 38″ 07° 42′ 00″ 280 35 16,275
18 07° 41′ 54″ 07° 42′ 15″ 275 80 37,200
19 07° 41′ 11″ 07° 41′ 15″ 310 65 30,225
20 07° 41′ 30″ 07° 41′ 30″ 290 45 20,925
21 07° 41′ 45″ 07° 41′ 45″ 285 40 18,600
23 07° 41′ 38″ 07° 41′ 15″ 310 65 30,225
24 07° 41′ 54″ 07° 41′ 30″ 255 10 4,650
25 07° 42′ 00″ 07° 41′ 45″ 270 25 11,625
28 07° 42′ 00″ 07° 41′ 15″ 275 30 13,950
34 07° 42′ 37″ 07° 41′ 30″ 245 80 37,200
  TOTAL FOR ZONE 2 DRILLING 615m 285,975


22 07° 41′ 22″ 07° 41′ 00″ 295 50 23,250
27 07° 41′ 48″ 07° 41′ 03″ 295 50 23,250
31 07° 41′ 53″ 07° 40′ 45″ 295 50 23,250
32 07° 42′ 00″ 07° 41′ 00″ 275 30 13,950
33 07° 42′ 23″ 07° 41′ 15″ 275 80 37,200
38 07° 42′ 19″ 07° 40′ 45″ 285 40 18,600
39 07° 42′ 30″ 07° 41′ 00″ 290 45 20,925
40 07° 42′ 45″ 07° 41′ 15″ 255 10 4,650
44 07° 42′ 37″ 07° 40′ 45″ 285 40 18,600
45 07° 42′ 52″ 07° 41′ 00″ 260 20 9,300
46 07° 43′ 07″ 07° 41′ 15″ 255 10 or 80 37,200
47 07° 43′ 24″ 07° 41′ 30″ 255 80 37,200
51 07° 43′ 00″ 07° 40′ 45″ 245 80 37,200
52 07° 43′ 15″ 07° 41′ 00″ 270 25 11,625
53 07° 43′ 28″ 07° 41′ 12″ 280 35 16,275
56 07° 43′ 28″ 07° 40′ 48″ 260 20 9,300
57 07° 43′ 34″ 07° 41′ 00″ 275 15 6,975
  TOTAL FOR ZONE 3 DRILLING 750m 348,750


26 07° 41′ 15″ 07° 40′ 30″ 325 75 34,875
29 07° 41′ 24″ 07° 40′ 15″ 305 60 27,900
30 07° 41′ 38″ 07° 40′ 30″ 295 50 23,250
35 07° 41′ 30″ 07° 40′ 00″ 295 50 23,250
36 07° 41′ 45″ 07° 40′ 15″ 275 30 13,950
37 07° 42′ 00″ 07° 40′ 30″ 305 60 27,900
41 07° 41′ 55″ 07° 40′ 00″ 275 30 13,950
42 07° 42′ 07″ 07° 40′ 15″ 300 55 25,575
43 07° 42′ 22″ 07° 40′ 30″ 270 25 11,625
48 07° 42′ 15″ 07° 40′ 00″ 290 45 20,925
49 07° 42′ 30″ 07° 40′ 15″ 290 45 20,925
50 07° 42′ 45″ 07° 40′ 30″ 255 10 or 80 37,200
54 07° 42′ 37″ 07° 40′ 00″ 295 50 23,250
55 07° 42′ 53″ 07° 40′ 15″ 255 10 or 80 37,200
58 07° 43′ 00″ 07° 40′ 00″ 265 25 11,625
59 07° 43′ 15″ 07° 40′ 15″ 260 25 11,625
60 07° 43′ 25″ 07° 40′ 02″ 265 25 11,625
  TOTAL FOR ZONE 4 DRILLING 810m 376,650
  GRAND TOTAL 2,805m 1,304,325

Scope of Operations

The overall coal mining process consists of several sequential stages:

  • Exploration of a potentially economic coal seam to assess minable reserves, environmental issues, marketable reserves, potential markets, and permitting risks
  • Analysis and selection of a mining plan
  • Securing the markets
  • Developing the mine
  • Extracting the coal
  • Processing the coal, if necessary
  • Decommissioning the mine and releasing the property for post-mining use

Coal Mining
Coal seams can be mined by surface or underground methods; the choice of mining method is dictated by both technical and economic factors. The most important technical factors are the thickness of the coal seam, the depth of the coal seam, the inclination of the seam, and the surface topography.
Each of these technical factors can set limiting conditions when considering the economic recoverability for a given coal, mining method, and market. The important economic parameters are the relative costs of mining coal by surface and underground methods including costs associated with any site-specific land use constraints, the cost of removing the material above the coal seam in the surface method, and the price of coal. The price for any particular coal is related directly to coal quality. Relatively shallow coal deposits are generally extracted by surface mining, and deeper deposits are extracted by underground mining. There are also situations in which a seam is mined by surface methods first, and then if adequate reserves are still available, the mine is developed for underground extraction.

Coal Processing
“Raw” or “run-of-mine” coal can be processed using physical separation methods to remove unwanted mineral matter to produce a “clean” coal. Processing adds value in several ways:

  • Removal of the mineral matter (or “ash”), which is largely non-combustible increases the heating value of the coal on a mass basis. Although some combustible material is lost as part of the cleaning process, the removal of unwanted material reduces the mass and volume of coal for a given heating value thereby reducing shipping costs as well as minimizing coal handling and ash management costs for the end user.
  • Processing allows greater control over the “quality” of the coal—principally ash and moisture—which improves its consistency for end users, such as electricity generators or coke manufacturers. Improved and consistent quality increases the efficiency and availability of steam boilers and is particularly important for the quality of metallurgical coke.
  • Physical processing can, to some extent, reduce sulphur and trace element contents, particularly on a heating value basis. However, generally coal cleaning is not practiced primarily for this purpose except for the metallurgical coal market.

The decision whether or not to process a particular raw coal depends on the coal and its intended market. The sub bituminous coal is almost always shipped to market raw because it has inherently low ash content and poor “washability,” The 11 coal preparation plants in the western states are located at bituminous.
The terms “coal preparation,” “cleaning,” “washing,” “processing,” and “beneficiation” are used synonymously to refer to physical enrichment of the combustible portion of the coal by selective removal of the non-combustible components, principally mineral matter and water. It is customary to refer to the mineral content of a coal as “ash,” and it is usually reported as such in coal quality descriptions. Ash content is determined by combusting the coal in air and converting the inorganic elements to their oxides.
Commercial coal characteristics, such as heating value, ash, moisture, sulphur, etc., are determined according to standards established by the American Society for Testing and Materials (ASTM), and are usually denominated in English units (Btu / lb for heating value on a mass basis).
The term “washability” is used to describe the ease with which mineral matter can be separated from the coal, and depends on the degree of incorporation of the mineral matter in the coal’s organic matrix and its specific gravity relative to the coal.

Coal Processing Plant
Coal processing is necessary in coal usage and supplying right size coal for coal industry. Coal processing plant is also important in coal mining equipment which process coal by crushing, grinding, conveying, screening, etc.
Coal processing is as follows: After coal comes out of the ground, it typically goes on a conveyor belt to a preparation plant that is located at the mining site. The plant cleans and processes coal to remove dirt, rock, ash, sulphur, increasing the heating value of the coal. During this coal processing, the used industrial equipment can be called coal processing equipment.

Coal Transportation
After coal is mined and processed, it is expected to be moved to end user. This might be in a distance of few metres to thousands of kilometres. Coal is transported by barges, ship, truck, train, conveyor belt and even pipeline.
It is often cheaper to transport coal on river barges, but barges cannot take coal everywhere that it needs to go. If the coal will be used near the coal mine, it can be moved by trucks and conveyors. Coal can also be crushed, mixed with water, and sent through a “slurry” pipeline.
Transportation of coal from the production site to either the close by jetty or rail way station are done by on road truck as seen below, local transporters are always available to render these services. The cost of transporting coal from the site in Kogi to the port in Lagos or Port Harcourt is estimated to be USD 20 per tonne.

Coal Production Cost
The cost of production of coal excluding capital charges and transportation is US$15 per tonne. Transportation to market and port is around US$20 per tonne.

In the derivation of the cash cost (shown above), most data used was derived from an existing test pit for 17,000 tonnes of coal for a 6 weeks period in the same locality. Prices can reduce drastically based on the volume and period of operations and the use of owners equipment. Local contractor pricing have been used to develop this study. Production rate was not considered. This is the fastest cost estimation without the amortisation of capital cost. Minimal use of contractor for operations is advised.
The pre-production cost for drilling and mining license approval is US$1.2 million.