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Dilby is a small rural place in Oromia, 65km from
Jimma, along the difficult track road to Konta
special Wereda, Southern Regional State. It would
have remained a pretty much unknown place had it not
been for the coal rich reserve found in its
vicinity.
Dilby-Moye basin is part of the South-western Plateau,
where some of the estimated four billion tonnes of
coal in Ethiopia is found.
Dilby, 415km from Addis Abeba, has become a kind of torch
bearer for the coal business. Reason being that for
the first time a company has mined 20,000tn of coal,
sparking the interest of some large scale
manufacturers in the country to use coal as an
alternative source of fuel.
The coal is extracted by Ethio-Pak Coal Mining Plc.. Two
companies under the Endowment Fund for The
Rehabilitation of Tigray - Ezana Mining and Mesebo
Cement Factory - have shares of 40 and 25pc
respectively. The rest is owned by Tradesman
Engineering, a Pakistani company.
This company was established in 2005 with a capital of 10
million dollars. It has been exploring for coal on
39 square kilometres in the Dilby area, and it
proceeded to extract the coal upon confirmation of
the finding.
“We are now ready to market the 20,000tn we have
extracted,” said a source in the company.
“The company has produced coal,” said Alenayehu Tegebu,
minister of Mines and Energy. “We expect that the
cement and textile industry will soon start using
coal.”
Mesebo, a co-founder of Ethio-Pak, might be the first
factory to start using coal, according to an expert
in the company. Located on the outskirts of Mekele –
seat of the Tigray Regional government – the factory
has an annual capacity of 630,000tn, using petroleum
and electricity as its energy sources. All cement
factories in Ethiopia use petroleum products to fuel
their furnaces, which according to experts; push
their cost of production upwards.
Mesebo uses 40 to 50 million litres of fuel oil annually,
the cost of which could go up to 400 million Br,
according to a company expert.
“This cost could go down by half, if the oil is replaced by
coal,” said this expert.
National Cement, Derba MIDRCO and Muger Cement
factories have also given signs that they could be
using coal. National Cement Factory was created when
East African Holdings bought 51pc share of the old
Dire Dawa Cement Factory from the Privatisation and
Public Enterprises Supervisory Authority. Now East
Africa Holdings has joined with Derba-MIDROC to form
the Derba-East Coal Mining Plc. This company has
been exploring for coal in the Moye area near in the
Dilby-Moye basin, and is expecting to start
exploration soon.
“The work is going on well; we will soon be using coal,”
said Woldegiorgis Mekonene, board chairman of
National Cement Factory.
“We are encouraging the existing and new cement factories
to use coal,” said Alemayehu, “because of the large
accumulation of the mineral in the country.”
The state owned Muger Cement factory decided to use
coal for its furnace nine months ago. Muger,
currently, uses 60 million litres of fuel oil to
produce 800,000tn of cement.
“The petroleum cost is high, so for the first time
we have turned to coal,” said Elias Kifle, Expansion
Project Head at Muger. “We may initially have to
import.”
Ethiopia’s annual need of cement is 50 to 55 million
quintals, whereas the supply, currently, is only 20
million. When those companies that have been
licensed and granted land begin operation, Ethiopia
will have 25 cement factories by current count.
Another potential coal user is Ayka Addis Textile
Factory, established in 2006 by Turkish Investors
who decided to relocate their factory in Ethiopia.
This company is located on 10ht of land in Alem Gena,
in Oromia. The company, which started production in
2008, aims to export 100 million dollars worth of
textile products.
“The factory has expressed interest to use coal,”
said Alemayehu. “We are working to facilitate its
conversion to coal.”
The petroleum coke which the cement factories are
currently using is supplied by companies selected by
a tender.
This fuel oil is the cheapest of petroleum products, but
far more expensive than the coal, Worku Gossa,
commercial department head of Ethiopian Petroleum
Enterprise, says.
Its low cost has made it preferable to the factories, but
environmentally coal may be more expensive than
petroleum.
“Financially, coal is more cost effective than petroleum
coke,” said Bekele Bayssa, board chairman of
Ethiopian Network of Sustainable Energy Development.
“But it releases more carbon into the environment.”
Helawi Lakew, manager of Ethio Resource Group, agrees with
the impact of coal on the environment, but adds that
Ethiopia will have to use it as there is no better
choice. |
