AshakaCem invests over 5Billion Naira in Coal Fuel Project

In Nigeria, coal is presently used as our energy fuel in brick factories, foundries, laundry and brickets industries. Other factories for which it forms an important raw material base are in tyre and battery manufacture as well as substitute for fuel wood in domestic cooking. And will be used in cement production when AshakaCem Plc starts coal burning.
There are 3 types of coal according to experts thus, bituminous, sub-bituminous and lignite. Lignite is the youngest, and it is what was discovered in Maiganga village of Gombe state. AshakaCem Plc is the largest cement producer in northern Nigeria and has been operating continuously since 1979. Its factory in Gombe State is able to produce 850,000 tons of cement a year while currently up rating its kiln capacity. Ashaka Cem Plc as a responsible corporate citizen is fully aware that Nigerian coal is suitable as energy fuel for firing the kiln. It has an installed coal capacity utilization of 300,000 tons per annum and a prospect of expanding current capacity utilization after the up rating project in the company.It is the objective of AshakaCem plant that lignite will represent 90% of its fuel requirements at 3000tpd of clinker after initial capacity increase, which is expected to bring down the price per Gigajoules (GJ) to 2.15 or 2.7 Euro per GJ from present 7.00 Euro per GJ. AshakaCem will secure fuel supply of at least 25 years in order to avoid Production short falls. Fuel shortage in 2005 lead to two weeks kiln stoppage with subsequent losses estimated at1.83 million euros in variable contributions. The usage of coal as alternative fuel will also leverage risk of fuel price increases and at athe same time reduce costs of production of clinker.In its quest to switch over to lignite usage, the company has finished exploration within selected area in Maiganga in Akko Local Government of Gombe State with an estimated proven reserve of 4.5 million tons. This reserve is expected to satisfy the Company’s requirement for more than 25 years. An additional 2 million tons reserve will be further investigated within its exploratory license (of 143 cadastral units), and this will be enough to develop a power plant.
The Ministry of solid minerals development respectively approves the mining and exploratory licenses within 153 and 30 cadastral units for 21 years with effect from May 2006. So far land assessment was completed by the Gombe State Ministry of Lands and survey and compensation was made to the landowners according to Government rate. AshakaCem on its part has paid a matching bonus as it used to do in any compensation exercise. According to the assessment conducted, the lignite project will cost AshakaCem Plc N5.5 billion (34.2 million Euros). AshakaCem Plc, as part of its social responsibility will undertake the complete resettlement of Maiganga village and 3 other hamlets, and provide infrastructures such as construction of 14 kilometers of Feeder Road up to Sambo Daji the District headquarter, 3 Bridges and about 20 culverts. Other amenities include the building of a primary school, mosque, a church, dispensary and boreholes for the affected communities.
Another interesting aspect of this venture is the invitation of experts from France and South Africa to join Ashaka team to commence field studies for the open up of Box - cut, thus providing job opportunities to community youth before commencement of real mining. Safety has high priority in Lafarge and Ashaka, and also very important in mining law. Some percentage of the labour force will go to the affected communities. Working with the experts is also a fulfillment of requirements by the mining law. Ashaka’s plan regarding the lignite project in 2007 is to open employment opportunity especially to the Local Community at least 60% of the labour. Proper mining will commence in October 2007 and lignite burning to start by January 2008 at its factory site.

Bakura M. Bajoga.
Dan’amar Funakaye
(Public Relations Manager)