International diversified resources company, Astra Resources Plc (FWB Code: 9AR), has finalised an initial geological investigation and feasibility study into its Nigerian thermal coal sites with promising results.
The geological investigation was undertaken to determine the coal potential and viability of the two coal sites Astra is developing through its joint venture agreement with Barjalex Nig Ltd.
The two sites sit within the Ogboyoga coal field of the Kogi Coal District, covering the Odelle, Manejo and Ichalla villages of the Ankpa Local Government Area of Kogi State, North Central Nigeria, and cover a combined area of 10.4 square kilometres.
A further extension located in the Ogboyoga coal field and covering 16.6 square kilometres has been discovered, for which Astra is in the process of purchasing an exploration license.
Astra CEO Dr Jaydeep Biswas says the investigation covered a total area of 30 square kilometres, spanning the current sites and the extension, with results indicating the existence of coal deposits mineable using an open cast mining method.
“After completing the geological investigation and feasibility study, it was concluded that while early indications of the coal resource within the two Barjalex sites require further investigation, the extension located within the Ogboyoga coal field has been identified as highly viable,” Dr Biswas says.
“Astra intend to further explore this area through drilling while taking all necessary steps to complete the application for a mining lease for the Ogboyoga coal fields.”
During the initial geological investigations six coal outcrops were encountered in the Okaba area with a coal thickness ranging from 0.8 to 1.6 meters.
From these results it can be inferred that the total coal tonnage of the 16.2 square kilometre extension area is 31.35 million tonnes that has significant value at present thermal coal prices.
Samples collected from the Ogboyoga coal field as part of this investigation are currently being analysed, however previous samples indicate the coal in the area is of high calorific value.
Astra Managing Director Silvana De Cianni says a further drilling and sampling program of the Barjalex coal property will be undertaken, occurring in two phases in accordance with JORC drill point spacing for indicated and proven resource calculation.
“The first phase of the program will consist of a few strategically placed drill holes at a spacing of approximately 1,500 meters to confirm the hypothetical resources estimation and enable the establishment of appropriate drilling points for phase two,” Ms De Cianni says.
“The second phase of drilling will focus on further exploring any potential economic deposits detected from the wide-spaced boreholes from phase one.
“Once all the data is gathered, an accurate estimation of the total volume of coal reserves present in the area can be calculated, and from this a total tonnage can be derived.
“The results ascertained from the sampling program will form part of the report that will be used to assess the qualification of the Barjalex exploration licenses for a mining lease.”
Geological investigations indicate the Ogboyoga coal field has the second greatest amount of available drilling of all the thermal coal areas reviewed for the report. Large surface and underground coal resources are present in the area, with seam thickness in the range of 1.2 to two meters.
Dr Biswas says no commercial mining has been done in the Ogboyoga coal field, and it is highly probable that further resources may be discovered with additional drilling. Astra is also looking to significantly expand the field by further acquisitions.
“As the thermal content of the coal is reasonably high, and the sulphur and ash content is low, the quality is very acceptable for power plant feed, making the potential of the area immense.”
Situated 20 kilometres south of the Ogboyoga coal field, the Okaba coal field which is adjacent to the Ogboyoga coal field has a large coal reserve that can be developed using surface and highly productive longwall methods.
A small surface mine was operated at Okaba in the past and some coal still remains in the pit. The high Btu content of the coal and low sulphur levels makes it of acceptable quality for a generating station.
Ms De Cianni says the domestic coal market within Nigeria has the potential to expand exponentially due to the country’s desire to revitalize the coal mining industry and utilize those resources to increase the country’s electrical generating capacity.
“Nigeria has major coal resources that have not been well explored or exploited,”
“The Nigerian Government has recently placed a high priority on utilizing these resources by attracting foreign companies to develop these large coal reserves.
“There is also the potential for domestic demand to increase exponentially, with coal briquettes expected to replace wood for cooking and domestic and industrial heating to reduce the rapid deforestation that is occurring due to the country’s growing population.”
“The coal present in the district and surrounds is low in sulphur and ash, and high in calorific value making it ideal for power generation and export into the international market.
“The Barjalex transaction creates a beach-head for growth in a region which has the potential of 800 million tonnes of thermal coal.”
With a population approaching 140 million, statistics indicate that Nigeria can be considered to have between 20 million and 25 million households.
Estimates of the minimum load demand or generating capacity indicate that the 10,000 MW of capacity targeted by the Federal Government of Nigeria is a reasonable reflection of the capacity necessary to satisfy the country’s actual needs for electricity supply in the near term, and that as electricity becomes available the demand can grow to over 15,000 MW.
Dr Biswas says 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,” Dr Biswas says.
“In order to meet these needs, approximately 3.2 million tonnes of coal will be required per year for each 1000 MW of capacity.”
The exploitation of coal for electricity generation and the production of coal briquettes for domestic and industrial heating will result in a number of benefits, including increased employment, expanded industrialization of the economy and a more reliable electricity supply.
Dr Biswas says Nigeria allows 100% per cent return of profits and offers a number of basic facilities necessary for coal mining and power generation, making Astra’s Nigerian coal opportunity a highly cost-effective venture.
“The Nigerian Government permits 100 per cent foreign ownership of mines and power generation plants, free trading zones and developed infrastructure including road links and railways, making this opportunity a perfect fit with Astra’s low risk business model,” Dr Biswas says.
“While there is high demand for coal internally, due to its proximity, Nigeria is in a prime position to become a major player in the international traded coal market to Europe due to the sizeable international market for seaborne trade, making Astra’s coal interests in Nigeria highly economical.”
Astra Resources’ global portfolio includes gold and iron sands interests in Southeast Asia, coal mine in Africa, iron ore in India, carbon efficient businesses, mining housing developments in Queensland and the production of the high-strength T-Steel technology in Hungary.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/25509/-astra-resources-uncovers-new-growth-opportunity-in-nigerian-coal--25509.html