STATISTICAL ANALYSIS OF COAL PRODUCTION IN NIGERIA (1990-1999)

STATISTICAL ANALYSIS OF COAL PRODUCTION IN NIGERIA (1990-1999)

CHAPTER ONE

INTRODUCTION

1. HISTORICAL BACKGROUND

The Nigeria Coal Corporation information manual (1990) states that “Coal was first discovered in 1909 at streams along Udi escarpment in Enugu state by the first group of British colonial adventures in Nigeria following a survey by the then colonial mineral survey department of southern Nigeria, actual mining started in 1916 at the foot of Udi hill along Enugu escarpment”. Iwu (1990) stated that “initially, the Coal industry was a unit of the marine department and Coal produced was supplied to the British for their steam boats. Other supplies included steam locomotive engines for the Nigeria Railways. Following the expansion of rail transportation, the coal industry was separated from the marine department and merged with the Nigerian Railway in 1937. heightened political

On the 18th of November 1949, twenty-one coal miners were gunned down by their employers at Iva Valley mine as a result of their awareness and strike action. THEN-British government established a commission of inquiry led by Sir Fitzgerald. This commission recommended that an independent body be established to manage government-owned businesses. The Nigerian Coal Corporation was established in 1950 by Ordinance No.29.”

Iwu (1990) went further to state that” the Nigeria Coal Corporation was then managed by the British was charged with the responsibility to prospect, mine, treat and market Coal and Coal by products in Nigeria. However, it was the shooting of twenty-one (21) coal miners in Enugu that sparked the outrage.

the spirit of nationalism that gave birth to Nigeria’s independence in October 1960. In addition to providing all of the energy requirements for the nation’s premier industries, the coal industry became one of the major foreign exchange earners for the then British colony.

The cement factories, construction companies, and the international market are the primary consumers of coal.

1. AIMS AND OBJECTIVES OF THE STUDY

The following are the goals of this study on coal production in Enugu.

Estimation of the trend in coal production over the last decade (ten years)
Determination of the seasonal impact on coal production over the last decade (ten years).
Identifying cyclical and irregular variation (if they exist).
Forecasting the expected irregularities in production one year in advance.

SCOPE OF THE STUDY

The analysis will be limited to coal production data from the Nigerian Coal Corporation Enugu from 1990 to 1999. It would investigate the growth pattern in coal production over the time period under consideration.

The choice of 1990 to 1999 was influenced by the federal government’s decision to rehabilitate the coal industry in 1985-89. As a result, the study will reveal how well the coal industry is performing in terms of production and future prospects.

The data for this analysis are divided into monthly coal output and daily coal output, which is weighed in the factory. The measurements are in tones, and they are added up at the end of the month to give the figures that are used.

1. LITERATURE REVIEW

COAL:

Coal is a flammable rock formed by the accumulation and partial decomposition of vegetation. Okafor (1981) defined coal as “a hard block mineral substance that burns and supplies heat and is used to produce coal gas.” He went on to say that “it has been formed out of decomposed plant matter for hundreds of thousands of years:.

Coal in Nigeria was formed around 120 million years ago by the action of pressure and heat on decayed vegetation during the Cretaceous period. The country’s coal reserves are estimated to be in the billions of tons.

According to Iman (1990), “the total coal reserve in the country is over 2.7 billion tons, of which 600 million tons have been proven.”

Ali (1996) also stated that “with an estimated reserve of 2.75 billions tones deposited in 13 states viz, Enugu, Kogi, Edo, Anambra, Plateau, Benue, Imo, Abia, Ondon, Bauchi, Delta, Taraba, and Adamawa states. Nigerian coal has limitless export potential.”

Coal is typically classified into four major divisions known as ranks based on appearance and properties.

The four main ranks are as follows:

Lignite
Sub-bituminous
Bituminous\sAnthracite
The great variety of form and chemical composition among coal ranks is primarily due to fundamental differences in the plant material from which they evolved.

Nigeria coal, according to the Nigerian coal corporation information manual (1997), is primarily sub-bituminous steam coal with low sulphur and ash content.

They have a high colorific value and a high colorific value.

Because Nigeria coals have low volatile components and are environmentally friendly, they have a high export potential, with current expert demand standing at 15 million metric tons per year.”

Coal can be mined using a surface coper pit, an open cast system, or an underground system. Surface mining entails removing the overburden, exposing the mine, and then extracting the coal. Our Okaba Coal mine has implemented the system. The underground mine is accessed via “shaft” or Adit. A shaft is a rectangular or circular hole driven from the surface to the coal seam of sufficient size to allow the use of equipment for both man and material conveyance. Shafts are not used in Nigerian coal fields.

The Adit method refers to working horizontally or moderately inclined seams.

According to Iwu (1990), “a high incidence of extractable waxy and resinous materials make Nigerian coal more amenable to utilization in the chemical industries, particularly as a source of resins, plastics, and aromatics.”

Nigerian coal is not only useful in the chemical industry; it can also be used in thermal power plants for electricity generation as a domestic fuel as an alternative to firewood, thereby preventing deforestation and the associated desertification and soil erosion, and as metallurgical coke for the iron and steel industry.

The coal industry in Nigeria has had one of the most chequered histories. It was once one of the country’s major foreign exchange earners.

However, in recent years, it has made no significant contributions to the economy.

Iwu (199) summarized the factors that contributed to the coal industry’s decline as follows.

“The civil was of 1967 to 1970 which left all the coal mine shut down flooded and all the equipment dilapidated.
the country’s rapid development and total reliance on the oil industry, and, more recently, the has industry in preference to coal for all entry needs.
The growing environmental concern about the impact of fossil fuel use, particularly coal.
Lack of a conscious, coordinated, and concerted effort by the various arms of government toward the integrated development of the country’s mineral resources.
There is currently no comprehensive energy policy in place for

Nigeria, which will outline a strategy for developing various energy resources as well as rationalizing energy production and distribution to ensure the country has a balanced energy mix.
Regardless of these issues, it is clear that the enormous potential of Nigerian coal is undeniable.

According to Onu (1997), “the annual demand for Nigerian coal at the export market is 120 million tons, while domestic demand is 170 million tons.” If properly harnessed, the coal industry has the potential to generate much-needed foreign exchange in the billions of dollars for the country. It is worth noting that, in recognition of this, the current administration is playing an important role in ensuring that coal is reintegrated into Nigeria’s energy matrix through increased production.

as well as large-scale utilization.

ANALYSIS OF TIME-SERIES AND ITS APPLICATIONS:

“A time series is a sequence of observations on a variable of interest,” Montgomery and Lynwood (1976) stated. The variable is observed at discrete time intervals that are typically equally spaced.

“Time series” is defined by Mordi (1992) as “an arrangement of statistical data ordered according to the fines of its occurrence in data classified chronologically.”

Thus, a time-series is a collection of numerical values of a specific variable listed in chronological order. The record of months scale and production of a company over a number of months or years, the schools daily attendance, amount of annual rainfall over a number of years, the weights of an animal record at different stages of growth are

Time series examples abound. Days, weeks, months, years, decades, or even seconds can pass.

According to Ifeagwu (1992), “time series involves classifying and studying the patterns of movement of the variable’s values over regular time. It improves comprehension of the past and current pattern of change. It provides dues about future patterns which aid in forecasting and such information is needed by researchers and policymakers”.

Spiegel (1972) and Nwabuokei (1986) discovered that time series’ characteristic movements can be divided into four categories. Components of a time series that are frequently caked.

Long-term or secular movements: refer to the general direction in which a time series graph appears to be moving over long periods of time. Long-term oscillations or swings around a trend line or curve are referred to as cyclical movements. These cycles, as they are sometimes referred to, may or may not be periodic in the sense that they may or may not follow identical patterns after equal internals for time. Only movements that recur after more than a year are considered cyclical in business and economic activity. The so-called business cycles, which represent intervals of prosperity, recession, depression, and recovery, are an important example of cyclical movement.
Seasonal movement: refers to the identical or nearly identical pattern that a time series appears to follow during corresponding months of successive years. Such movement is caused by recurring events that occur annually, such as the sudden increase in temperature. Before Christmas, department stores have sales.