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 were to the Nigeria Railways for the steam locomotives engines. Following the increase in transportation activities by rail, the Coal industry was excised from the marine department and established with the Nigerian Railway in 1937. Increased political awareness and a strike actin by Coal miners to back up demand for wage increase resulted in the gunning down of twenty-one Coal miners at Iva valley mine by their employers on 18th November 1949. THE THEN British government set up a commission of inquiry headed by Sir Fitzgerald. This commission recommended that independent body been set up to manage government established business. In 1950 by the ordinance No.29. The Nigerian Coal Corporation was born”

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 the twenty-one (21) coal miners in Enugu that awakened the spirit of nationalism which subsequently gave birth to Nigeria’s independence in October 1960. The Coal industry gave rise to the first set of industries in Nigeria besides providing all the energy requirements for the nations premier industries, Coal became one of the major foreign change; earners for the then British colony.

The principal consumers of Coal are: The cement factories construction companies and overseas market

1. AIMS AND OBJECTIVES OF THE STUDY

This study on the production of Coal in Enugu has the following objectives.

1. Estimation of the trend on production of coal for the past decade (ten years)
2. Determination of the seasonal influence on production of coal for the past decade (ten years).
3. Determination of the cyclical and irregular variation (if they exist).
4. Forecasting on the expected irregular of the production in future say one year ahead.
   
   
   
   1. SCOPE OF THE STUDY

The analysis will be confined to the Coal production data covering 1990 to 1999 at the Nigerian Coals Corporation Enugu. It would study the growth pattern in coal production for the period under study.

What informed the choice of this period 1990 to 1999 is that it was in 1985-89 that then federal government decided to rehabilitate the Coal industry. Thus, the study will reveal how well the coal industry has some in terms of production and the future prospect.

The data for this analysis are categorized into monthly output of coal these are the daily output of Coal it is weighed in the factory. Measurement is in tones and it is cumulated at the end of the month to gives the figures being used for the study.

1. LITERATURE REVIEW

COAL:

Coal is a combustible rock which has its origin in the accumulation and partial decomposition of vegetation. Okafor (1981) described coal as “ a hard block mineral substance that burns and supplies heat and from which Coal gas in made” He went further to state that “it is formed out of decomposed plant matter for over hundred of thousand of years:.

The Coal in Nigeria was formed during the cretaceous period about 120 million years age, by the acting of pressure and heat on decayed vegetation. The coal reserves in the country are estimated to run into billions of tones.

Iman (1990) stated that “the total coal reserve in the country is over 2.7 billion tones and of which 600 million tones 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. Nigeria coal has unlimited potentials for export”

Coal is classified into four main divisions usually, referred to as ranks depending on appearances and properties.

The four main ranks are:

1. Lignite
2. Sub-bituminous
3. Bituminous
4. Anthracite

The great diversity of form and chemical composition among the coal ranks is due to principally to the essential differences in the plant material from which they have evolved.

Nigerian coal corporation information manual (1997) described Nigeria coal as being mainly sub-bituminous steam coals with low sulphur and ash contents.

They are characterized by high colorific value and high volatile components and are found to be environmentally friendly for this reason, Nigeria coals have great potential for export with current expert demand standing at 15 million metric tones per annum”

Coal can be minded by either surface coper pit or open cast or underground system. Surface mining consist essentially of removing the overburden this exposing the mine and then extracting the coal. The system is being adopted at our Okaba Coal mine Access to underground mine is either by “shaft” or Adit. A shaft may be a rectangular or circular hole driven from the surface to the coal seam of reason able size to allow the use of equipments for conveyance of both men and materials shafts are not used in Nigeria Coal fields. The methods of working horizontally or moderately inclined seams are known as Adit method.

Iwu (1990) observed that “a high incidence of extractable waxy and resinous materials make Nigerian Coal more amenable to utilization in the chemical industries especially as source of resins, plastics and aromatics. “Nigerian Coal are not only useful in chemical industries, it can also be used in thermal power station for electricity generations as domestic fuel as alternative to fire word thus ensuring a stop to deforestation with the consequent desertification and soil erosion as metallurgical coke for iron and steel industry.

The Coal industry has had one of the most cheques of histories in Nigeria. It was at one time one of the major foreign exchange earners in the country but in the recent past has not made any significant input t the economy.

Iwu (199) summarized the factors that contributed to the deteriorated state of the Coal industry as follows.

1. “The civil was of 1967 to 1970 which left all the coal mine shut down flooded and all the equipment dilapidated.
2. the rapid development and total dependence in oil industry and latterly the has industry in preference to coal for all the entry needs of the country.
3. The growing concern on the environment at impact of fossil fuel utilization especially coal.
4. Lack of conscious, co-ordinated and concerted effort between the various arms of government toward an integrated development of the mineral resources in the country.
5. There is not yet a comprehensive energy policy for Nigeria, which will stipulate strategy for developing various energy resources and rationalization of energy production and distribution to ensure a balanced energy mix for the country.

Inspite of all these problems, it is clear that the enormous potential of Nigerian coal is unquestionable.

Onu (1997) observes that “the annual demand for Nigerian Coal at the export market is 120 million tones while domestic demand for it stand at 170 million tones” The coal industry can, if properly harnessed generated the much needed foreign exchange in billion of Dollars for the country. It is note worthy that the present administration in recognition of this is decidedly playing a vital role to ensure that coal is re-integrated in to the energy matrix of Nigeria, through increased production and export as well as large scale utilization.

TIME-SERIES ANALYSIS AND APPLICATIONS:

Montgomery and Lynwood (1976) stated that “a time series is a sequence of observations on a variable of interest. The variable is observed at discrete time points usually equally spaced.

Mordi (1992) defined “time series as an arraignment of statistical data ordered according to the fines of its occurrence in data classified chronologically. “Thus a collection of numerical values of a particular variable listed in chronological order is known as time-series. 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 all examples of time series. the time can be days, weeks, months, years, decades or even seconds.

Ifeagwu (1992) states that “time series involves classifying and studying, the patterns of movement of the values of the variable over regular time. It enhances under standing of  the past and current pattern of changes. It provides dues about future patterns which aid in forecasting and such information is needed by researchers and policymakers”.

Spiegel (1972) and Nwabuokei (1986) observed that the characteristic movements to time series may be classified into four main types. Often caked components of a time series.

1. Long term or secular movements: refers to the general direction in which the graph of a time series appears to be going over long interval of time.
2. Cyclical movements: refers to the long term oscillations or swings about trend line or curve. These cycles, as they are sometimes called May or may not be periodic is they may or may not follow exactly similar patterns after equal internals for time. In business and economic activity, movements are considered cyclical only if they recur after time intervals of more than a year. An important example of cyclical movement is the so called business cycles representing intervals of prosperity recession, depression and recovering.
3. Seasonal movement: refer to the identical or almost identical pattern which a time series appear to follow during corresponding months of successive years such movement are due to recurring events which take place annually, as for instance the sudden increase of departmental stores sales before Christmas.

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