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Nigeria: Coal-to-Power - Coy Confirms $1.2 Billion Worth of Coal
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Leadership (Abuja)
18 June 2008
Posted to the web 18 June 2008
Teddy Nwanunobi
Western Goldfields Limited has disclosed that it has discovered 62,400,000 metric tonnes of proven reserves of coal deposits that are worth $1.2 billion (about N165 billion) on its Exploration Licence, EL829 situated at Ezimo, Obollor-Afor, near the university town of Nsukka in Enugu State.
According to the Chairman of the company, Mr. Philip Pereira, Western Goldfields is also partnering with the United Bank for Africa and China Huadian Corporation (the second largest power producers of China - with over 70 power stations) in its electricity project, which would see coal converted to power to generate 250 megawatt of electricity in six states of the federation.
Pereira, who made this revelation yesterday in Abuja, said that the pilot scheme was a testing ground for machinery and equipment, as well as personnel that will be involved in the large-scale explorations that will soon commence simultaneously on 12 ELs located in six states, namely Anambra, Benue, Delta, Enugu, Imo and Kogi.
He also said that with the coal and lignite deposits on these licences, the company will from 24 months of ascertaining their proven reserves, produce a total of 1,500 megawatt of electricity for the next 25 years into the national grid.
"In September, we shall be able to present accurate timelines to President Umaru Yar'Adua and the people of Nigeria for the solutions we plan for the country's power problems.
"Once our coal reserves are proven, it will take about 24 months for one power station of 250 megawatt to become operational in each of the six states, generating a total 1,500 megawatt. Exploration of proven coal reserve will be a continuous process, and will be followed by the development of mines and power stations until the nation's requirement for power are met and exceeded," Pereira hinted.
He also disclosed that by the end of July 2008, the drilling activities at the pilot scheme will have provided enough answers like proven coal reserves, cost as well as other variables to enable the consortium perfect all new equipment being brought in as well as improve its procedures and train more personnel.
He noted that the company will, however, apply for a licence from the Nigerian Electricity Regulatory Commission to build independent power plants after it had proven the reserves of coal needed to build the planned power stations.
While expressing the United Bank for Africa's willingness to partner in the project, the Head, Corporate Affairs, UBA, Mr. Rotimi Balogun, observed that the coal-to-power project embarked upon by the company is of both business interest to the UBA, as well a patriotic responsibility in view of what improved electricity will do to the socio-economic development of the country.
"We indicated interest in the project because meeting the nation's electricity challenge would be instrumental key to the transformation of the nation's economy. Meeting the deficit must be through diversified sources and not necessarily through thermal station as it is presently the case.
"We have 700 branches across the country, and each branch has nothing less than two generators. If you look at the amount of money spent on buying generators, fuel and the environmental impact it bears on the country, you will understand that improved power supply should be of serous concern to us," Balogun said.
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Balogun, however, revealed that the bank was still monitoring every step taken by the company until their study of the projects shows that there would be return on investment, adding that "UBA may even stand as a guarantor for the company for offshore funds."
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