Document(s) 4 of 29

Introduction

Table 1. Nigerian coal production (1916–87).
Year	Production (long tons)	Year	Production (long tons)	Year	Production (long tons)
1916 1917 1918 1919 1920 1921/22 1922/23 1923/24 1924/25 1925/26 1926/27 1927/28 1928/29 1929/30 1930/31 1931/32 1932/33 1933/34 1934/35 1935/36 1936/37 1937/38 1938/39	24 511 83 405 145 407 137 844 180 122 194 073 112 818 175 137 220 161 242 582 353 274 345 303 363 743 347 115 327 681 263 548 259 860 234 296 258 893 257 289 310 308 391 159 323 266	1939/40 1940/41 1941/42 1942/43 1943/44 1944/45 1945/46 1946/47 1947/48 1948/49 1949/50 1950/51 1951/52 1952/53 1953/54 1954/55 1955/56 1956/57 1957/58 1958/59 1959/60 1960/61 1961/62	300 000 318 594 402 640 463 978 528 421 505 568 610 283 633 852 551 706 610 283 526 613 583 487 566 393 613 374 679 437 675 918 750 058 790 030 846 526 905 397 684 800 565 681 596 502	1962/63 1963/64 1964/45 1965/66 1966–70 1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 1983 1984 1985 1986 1987	615 681 600 229 698 502 730 183 Civil war 264 258 323 001 314 457 250 769 257 832 249 446 246 192 188 806 153 005 114 875 63 122 52 730 83 461 139 744 151 214 110 161 82 487
Source: Nigerian Coal Corporation. Note: 1 long ton = 1.016 t.

Of course, there were many reasons for the decline of the coal industry. Some factors were external to NCC. Among these were the following:

• the advent of the "oil boom" and the shift of attention from coal;

• the "dieselization" undertaken by the Nigerian Railway Corporation (NRC), which had been a major customer of the coal industry;

• the switch to natural gas and oil by several power stations run by the National Electric Power Authority (NEPA), another major customer; and

• the disruptive consequences of the civil war (the mines had been at the heart of the war zone).

In 1976, the year that productivity began to decline, the Nigerian government commissioned the state-owned Polish Overseas Mining Company, KOPEX, to completely modernize NCC's technology, installing fully mechanized longwall equipment, with shield support. The investment and installation process lasted 3 years and was completed in 1979. Production was expected to grow from a first-phase installed capacity of 624 000 t/year to 1 Mt/year.

What happened was the exact opposite: the installation of the first phase marked the beginning of an incredible productivity slump at NCC. In the 1960s, productivity had been 0.6 t/person per shift (Table 2). In 1979, it was 0.09 t/person per shift. NCC abandoned the new and expensive machinery, after which productivity rose again. By 1986, it was 0.36 t/person per shift. NCC continued to be a drain on government, and, like all other public enterprises of its kind, it was placed on the list of enterprises to be commercialized.

Table 2. Productivity of the Nigerian Coal Company (1960–86).
	Productivity (t/person per shift)	Remarks
1960s	0.60	Semi-mechanized longwalls with conveyor belts and single props were in use
1979	0.09	This is after the installation of the fully mechanized longwall system
1982	0.40	There has been a slight improvement, but productivity lags the 1960s values, when semi-mechanized longwalls were in use
1986	0.36	There has been a further decline

This failure of NCC is one of the reasons for this study. There are a number of radical technical and managerial conditions that an enterprise of this kind must meet to achieve sustained productivity growth. The study should bring out the kinds of policy lessons that will be useful for similar firms in Nigeria and elsewhere.

In addition, because this 70-year-old industry is unique among the heavy industries in Nigeria, it gives us an opportunity to examine what happened over a relatively long historical period. The nexus of technology choice and productivity growth represents two sides of the same coin (Pack 1987), requiring adequate time-series data. It is left to be seen whether the age of a firm directly correlates with its technological capabilities or its ability to become a mature enterprise.

The research problem

1. Under what terms was the foreign technology chosen?

2. What was the basis of this choice — a quest for the "most modern," the "most sophisticated"? For instance, why was the KOPEX technology chosen over one from other firms or other countries? Was a fully mechanized longwall process really the most appropriate system for the geological conditions at the Enugu, Orukpa, and Okab mines?

3. What was the nature of the finance capital? Was it a tied loan that could compel an inappropriate choice of technology?

Following from the above, the study proposes to trace NCC's operations over a long period to bring out the factors responsible for the observed behaviour and those responsible for the productivity performance. There are several approaches we could take. According to Pack (1987, p. 41), we can

emphasize one major obstacle (absence of "modernity") in an occasionally tautological way, and the implicit hypotheses are largely incapable of being tested or quantified. A more fruitful approach involves the identification of the most likely major sources of deviation from best-practice productivity and the quantification of each of them where possible.

• Hypothesis 1 — NCC's management made little or no effort to build plant-level technological capacity to cope with the idiosyncratic nature of the plant.

• Hypothesis 2 — NCC lacked the basic knowledge and experience to operate the new manufacturing process.

• Hypothesis 3 — Both KOPEX and NCC management paid little attention to the organization of human resources during the important start-up phase.

• Hypothesis 4 — The poor performance of the new equipment is directly traceable to the initial decisions NCC made in the preinvestment phase.

• Hypothesis 5 — External infrastructural and economic constraints played a big part in NCC's poor performance.

• Hypothesis 6 — NCC's choice of frontier technology was not appropriate for the mine's environment.

The research objectives

1. What specific technical and economic regimes led to the observed performance of NCC and the industry at different times?

2. To what extent did the industry adopt technical advances over time and what was the impact on productivity growth?

3. Human resources are crucial to the profitable operation of old and new plants. What has been NCC's human resources policy, quantitatively and qualitatively? What has the trend been in its labour productivity?

4. What informed the huge technology investment of 1976–79? Was it plant obsolescence, simply a drive to "modernity," or a serious effort to achieve greater production capacity and higher efficiency? Above all, why and how did the project fail?

Scope of study

• NCC's production records from 1916 to 1987 — This time scale was meant to encompass production records from long before the Nigerian civil war (caused a major disruption), the "boon years," the "lean years," and the period of the structural adjustment program. These milestones might help to explain the conditioning influence of NCC's environment.

• Specific technoeconomic indicators, such as productivity measures of capacity utilization, capital use, plant-use efficiency, sales, and turnovers — These indicators would chart NCC's evolutionary trajectory. Although such indicators have limitations, they can throw some light on NCC's performance.

• NCC's technical and managerial staff — Staff were evaluated to see whether they were capable of operating the mines and effecting technical change.

• NCC's stock of plant and machinery, especially the KOPEX-installed system — These were examined to see how much artefactual and other constraints affected NCC's technical progress.

• NCC's modernization efforts — NCC's efforts were reviewed to see why the modernization plan failed. The preinvestment (preparation), investment (construction), and postinvestment (production) phases were examined to extract any evident learning that could be applied in future policymaking.

• Market-mediated factors — Although firm-level factors like technomanagerial capacity and equipment efficiency may help explain plant performance, it is necessary to ascertain the importance of the additional constraints and inducements that conditioned the growth of the industry.

Methodology

Table 3. Activities in the typical technical-investment process.
Phase	Activities
Preinvestment: preparation	Identification of the project's technical and economic requirements
Investment: construction	Basic engineering studies; design engineering; equipment specification, procurement, and testing; supplier and capital goods selection; civil engineering works and equipment erection, commissioning, and start-up
Postinvestment: production	Plant debugging, modifications, redesign, and adaptations; process and product engineering; and so on

I collected all available technical, economic, and financial data for each phase and analyzed these to determine the project costs, financial clauses, and choice of technique, raw materials, and energy and how well these latter variables were suited to the technoeconomic environment.

It is inevitable that the choices made during the first two phases would bear heavily on the postinvestment phase. Analysis of operational data would provide useful evidence of the way the project was conceived and implemented. Data were collected to reveal maintenance capability and the quality of machinery and equipment.

In the postinvestment phase, a process plant requires certain basic technological, material, and managerial inputs to function well (see Oyeyinka 1988 for a full elaboration). These include basic feedstock (e.g., raw materials, energy, utilities); technical and organizational capacities, (e.g., operational, maintenance, and innovation capabilities); and replacements (e.g., spare parts and consumables).

The overall technical capability of an enterprise is a function of its ability to simultaneously provide all these components. To capture firm-level performance, I looked at the following parameters:

• capacity utilization, which represents the ratio of the level of output actually produced (Q_a) to the capacity output of the plant (Q_p);

• production rate, which is tonnage/hour;

• capital use or plant availability (%), which is the number of operating hours divided by the number of available hours within the period; this indicator measures plant efficiency and, indirectly, maintenance capability; and

• labour productivity, which is tonnes/person per shift.

Data collection

To get a view of the two sides of the equation, the demand and supply sides, I used a set of questionnaires to randomly sample the users and potential users of coal and coal products: NEPA, NRC, and the steel plants. I was unable to visit the various NEPA installations and had to seek information from the headquarters.

Technical change in the coal industry

This was the age of the industrial revolution, and coal was at centre stage. Indeed, in the first two technological revolutions, spanning the period between the 1770s and 1890s, the coal industry was a key sector (Freeman and Perez 1988). Coal, in a cluster with the pig iron (the iron and steel sector), cotton, and railway industries, fostered dramatic new growth in textiles, chemicals, machinery, water power, iron castings, machine tools, and shipping. Coal, thus, qualifies as what Freeman and Perez referred to as a "key factor" input in the creation of a new technoeconomic paradigm.

Freeman and Perez (1988) clearly defined the "key factor" in a paradigmatic change and the conditions that must be fulfilled. To properly conceptualize the pervasive effects of the technoeconomic change the coal industry introduced at the time, one must view these effects as much wider, as Freeman and Perez emphasized, than just a "cluster" of innovations; that is, the paradigm change is

a combination of interrelated product and process, technical, organizational and managerial innovations, embodying a quantum jump in potential productivity for all or most of the economy and opening up an unusually wide range of investment and profit opportunities. Such a paradigm change implies a unique new combination of decisive technical and economic advantages.

Technical change was then directed toward increasing the productivity of the mines. The manual methods of supporting the roof and extracting, loading, transporting, and grading were replaced with mechanical methods.

Nevertheless, innovation ever since has remained incremental and focused on these key aspects of coal mining, and these have been quite certainly responsible for the observed productivity change in the industry.

Coal mines are heterogeneous because of the differences in their natural bedding conditions, such as the thickness and slope of coal seams. It follows that mining machinery has to be designed to accommodate the idiosyncratic conditions of the mines.

Hence, the incremental innovations were meant not only to foster productivity growth but also to accommodate a wide range of geological conditions. For instance, shearers and self-advancing roof supports were initially developed for flat and moderately thick seams, but much later, functionally different equipment, albeit with the same name, had to be developed for steep bedding and thin seams. In sum, although bedding conditions may require differentiated techniques, mining technologies vary little. For example, techniques for underground mining can be divided broadly into longwall and shortwall; each is suited for a particular range of geological conditions.

Not all countries with substantial coal reserves adopted the different innovations at the same time, but most investments in mechanization ended in the 1960s. By this time, "large scale application of machines to coal face operations... with fully mechanized longwall mining 'system'" (Clark 1987) was in place. This new system, amenable to remote-control monitoring through microelectronics, sharply increased productivity, which rose from around 1.2 t/person per shift in the mid-1950s to 2.2 t/person per shift by 1970, almost 100%.

In other areas, information technology improved the management of collieries most dramatically, leading to great savings in labour costs. Modern technologies, such as those using X-rays, are improving the quality control in coal properties; new conveyor and elevator systems have replaced manual methods of transportation; and new ventilation techniques have been introduced.

Table 4 lists the major innovations in the industry since World War II.

Table 4. Major post-war innovations in coal mining.
Innovation	Description	Diffusion
Armoured face conveyor	Basic face equipment that mechanized face activities	Practically 100%
Hydraulic props and cantilever bars	Early roof-support system that allowed the introduction of narrow-web power loaders	Started to be introduced widely, but overtaken by newer technology
Narrow-web power loaders	Machines operating on a "Prop-free front system" that resulted in a large reduction in personnel	Incorporated in newer technology
Powered roof supports	Self-advancing jacks that reduced the amount and degree of manual labour involved in advancing a face	Practically 100% incorporated in newer technology
Shearer–loader (Anderton)	Basic machinery of all mechanized systems	Practically 100% incorporated in newer technology
Fully mechanized advancing face	A shearer–loader system but with improved safety	Practically 100% incorporated in newer technology
Prop-free front longwall mining system	A system that allows the use of power supports and application of high-horse-power cutting machines to traditional coal-face layouts
X-ray measurement of ash content	A rapid method of determining ash content that allows automatic blending	Very widely used
Carbonization and combustion in fluidized beds		Technique still awaiting perfection, although many experimental applications in operation
Coal gasification	Starting with the Lurgi process, several modified and novel processes known	Limited application only, although several pilot plants in operation (e.g., Westfield in Fife)
High-temperature combustor for MHD power generation	Equipment that burns coal at > 2000°C (part of MHD program)	Pilot scale demonstrated; depends on fate of MHD
Coal liquidation	Old (Fisher–Tropp, etc.) processes	Still in use but not economic enough, not generally applied (apart from South Africa); various approaches still in R&D phase
Coal desulfurization	Removes sulfur from emissions, but various appliances expensive	Appliances not widely used yet; better methods for preventing pollution being sought
Better environmental control	Methods to monitor and control emissions of grit, dust, tar vapour and other gaseous constituents (including SO2)	Appliances not widely used yet; better methods for preventing pollution being sought
Remotely operated longwall face	Advanced system for remotely operated mining operations	Very limited introduction, but overtaken by electronic developments
Microelectronic applications	ATM and HD mechanization that use microprocessors and computers; the basis of NCB's fundamental schemes for further development	In course of wide introduction; 7 ATM and 35 HD schemes in operation in 1983
Coal for metallurgical coke manufacture	Aims at upgrading lower quality (noncoking) coal by various methods such as preheating, adding inert matter, controlled blending	Commercially applied, but not widely
Notes: ATM, advanced technomining; HD, heavy-duty.

The Nigerian coal industry: historical background

The extensive coal deposits in Nigeria vary in grade and structure from area to area. The reserves, shown in Table 5, are not equally distributed but have a total potential of almost 3 Gt. This supply is expected to last for well more than 100 years.

Table 5. Nigerian coal reserves by location.
State	Location	Indicated in situ reserves (Mt)	Inferred reserves (Mt)	Overall reserves (Mt)
Anambra	Enugu Ezinmo Inyi	54 56 20	200 60 Unknown	254 116 20
Benue	Onikpa Okaba Ogboyoga	57 73 107	75 250 320	132 323 427
Delta	Asaba	250	Unknown	250
Plateau	Lafia–Obi	22	Unknown	22
Other states			1160	1160
Total		639	2065	2704
Source: Nigerian Coal Corporation.

Subbituminous coal is found mainly in the north–south belt, stretching from the Afikpo and Okigwe area, through Enugu and Ezimo, to Orupa, Oturkpo, Okaba, Dekina, and Idah and from Afuji in Delta State northward, to Koton Karifi in Kwara State.

Lignite deposits are found in the southern belt, stretching from Umuahia to Ihioma and across to Nnewi and Onitsha. The belt extends to Asaba, Oguwashi– Ukwu, and Odiasa and finally ends near Okitipupa. The lignite deposits are found close to the surface, so mining is easier and cheaper than for the deeper coals.

Coking coals, found in the Lafia–Obi coal field, are high in sulfur and have to be processed before use.

Before independence in 1960, coal was the major energy resource. There was not much of an alternative, anyway, and this caused a steady increase in coal production, as shown in Table 1. Between 1916 and 1928/29, there was steady and consistent growth in production rates, from about 2500 t to almost 370 000 t. NRC and the electricity suppliers in the country were the major consumers of coal in this period. The construction of the Port Harcourt – Enugu rail line was an important catalyst for the accelerated growth of coal production.

During the Great Depression (1929–39), however, production fell to a low of about 238 000 t (1933/34) from the previous peak of almost 370 000 t (1928/29). This represents a fall in annual production of 132 000 t. Production improved tremendously during World War II, reaching 514 000 t in 1944/45.

The peak production times in the history of the Nigerian coal industry was in the late-1950s, with an average output of more than 806 000 t. Until independence in 1960, coal was a major component of the commercial energy needs of the country. The exit of the colonial masters, however, saw a very sharp fall in production, from almost 920 000 t in 1958/59 to about 575 000 t in 1960/61.

Shortly after, though, production picked up again, steadily growing until the civil war cut off production completely for 3 years (1967–70). The mines destroyed during the war were repaired, and production resumed in 1970/71. Output rose to a maximum of about 328 000 t in 1971/72, by which time the extraction of oil and gas in Nigeria had begun in earnest. The oil boom led to an almost total neglect of the coal industry: NCC's major customers, such as NRC, started using the less bulky and much more efficient diesel oil. In addition, most of the NEPA power-generating stations abandoned coal in favour of natural gas, oil, or hydroenergy. This was not peculiar to Nigeria: the world also switched to nonsolid fuels. Other West African countries that formerly imported Nigerian coal for their railways also changed to diesel. Consequently, the shrinking market led to the gradual decline in coal production in Nigeria. However, there was still a potentially high demand for coal because most ECOWAS member states were not oil producers.

Enugu coal field

• modern, well-ventilated adits (tunnels), with belt and rail conveyors;

• a modern coal preparation and beneficiation plant, capable of handling 250 t/h and linked by rail to the NRC rail network;

• aerial ropeway haulage connecting the two existing mines, Onyeama and Okpara, to the preparation and beneficiation plant; and

• a good road network, capable of taking heavy coal transporters, that connects Enugu and Oturkpo.

The Enugu coal field has proven reserves of 54 Mt, and each of the two mines can rapidly be mechanized to a production capacity of more than 1 Mt/year.

Okaba coal field

• Opencast mining is a cheaper and quicker method of mining coal than underground methods. Okaba has a proven reserve of 73 Mt, of which 19 Mt can be mined by opencast mining.

• Okaba lies close to the proposed road and rail line from Ajaokuta to Oturkpo.

Ogboyoga coal field

Lafia–Obi coal field

The area is geologically disturbed and has many normal and reverse faults, with throws of 8–125 m. The seams dip from 1 in 14 to 1 in 2, and nowhere are they level. In-seam exploration was required to see if it was feasible to mine the coal field. This exploration was to take about 2 years, at a cost of about 16 million NGN.

Experts expect that mining may well be difficult. Because of the high sulfur content, the mine water is likely acidic and, therefore, corrosive. Based on these constraints, the capacity of the Lafia–Obi coal field may be limited to 450 000 t/year of run-of-mine (ROM) product. Because of the poor quality of the ROM product, the coal will need cleaning. The yield of the cleaned product will be very low (about 20%), amounting to about 90 000 t/year. This is equivalent to about 7% of Ajaokuta's initial demand. Consequently, the Lafia–Obi coal field would provide only a fraction of the blend of coals needed for Ajaokuta if this field is ever mined.

Description of production techniques

Research findings

Machinery and equipment failures

1. The conveyor chains, made of high-carbon steel (a brittle material), broke down incessantly.

2. The shearer–loader combines were not fitted with a plow, resulting in inefficient loading on the chain conveyor. It is worth noting that the plows were actually paid for and were in stock at the time.

3. The shearer drums were in fixed positions and, therefore, could not be altered to the shifting configurations of the roof and the floor of the seam.

4. Overall, there was so much system mismatch that it led to an unusually high rate of mechanical wear and tear.

Geological and infrastructural weaknesses

The operations also suffered considerably from inadequate transportation. Railway wagons needed to evacuate the coal were in very short supply, and the resulting dumping of coal created blockages in the coal bunkers. Nominal production targets could not be met, and what was produced could not find its way to the consumer. Power supply was inadequate, and outages were more the rule than the exception. The estimated production loss resulting from power outages alone was about 21 000 t in 215 h. Power outages also created severe flooding problems because the pumps were inoperative most of the time.

Human resources deficiency

There is no evidence that NCC even conceived of a commissioning team, and there was no awareness of the complexity of the human resources requirements for what was, in fact, a new system. Even the Polish engineers at the site were of very limited use to operation and maintenance. It is unclear whether KOPEX did in fact deploy its most competent engineers. What may well have undermined the effort of the KOPEX engineers, if, indeed, they had the requisite capabilities, was the extremely poor supporting infrastructure.

Analysis of research findings

The general findings

Period	Average output (t/year)
1960/61–1966/67 1967/68–1969/70 1970/71–1975/76	645 000 Nil (civil war) 281 000

At the time of the first phase of the installation of the Polish equipment, a nominal production target of 3.7 Mt was set for 1976/77–1981/82. For the 6 year period, only 831 830 t was produced, representing a capacity utilization of 22.5% (see productivity figures in Table 2). The dismal physical outputs were reflected in the financial performance of the firm. NCC's liquidity problem was so severe that regular overdraft spending was needed to cover operating costs.

Human resources

Table 6. Elements of investment and production capability versus NCC's action (or inaction) in the acquisition of KOPEX technology.
Element of investment capability and purpose	NCC'S action (or inaction)	Consequences
Human-resources development: to prepare for start-up	No special training was undertaken; there was no proactive strategy for start-up personnel; aged and illiterate staff were in the majority	No start-up lessons were learned; start-up was chaotic
Preinvestment feasibility studies: to identify projects and potential feasibility of alternative design concepts	No prefeasibility study was undertaken	Physicochemical properties of mine were unknown
Detailed studies: to make tentative choices among design alternatives	No detailed studies were undertaken	NCC was limited to only one choice
Basic engineering: to supply core technology in terms of process flows, material and energy balances, specifications of principal equipment, and plant layout	Basic engineering function was surrendered to supplier of the technology	All flow A and flow B technologies without any technical inputs from NCC came from KOPEX, whose knowledge of the physical environment was very limited
Detailed engineering: to supply peripheral technology in terms of complete specifications for all physical capital, architectural and engineering plans, construction, equipment, and installation	Detailed engineering function was surrendered to supplier of the technology
Procurement: to choose, coordinate, and supervise hardware suppliers and construction contractors	No search was conducted for alternative supplies: no efforts were made to master procurement skills	Project cost too much; inappropriate machinery was selected
Embodiment in physical capital: to accomplish site preparation, construction, plant erection, and manufacture of machinery and equipment	Approach was passive
Start-up and commissioning: to attain predetermined norms	No proactive strategy was formulated for start-up	Seed of future undercapacity and declining productivity was sown here
Production management: to oversee operation of established facil ities	NCC flaws were mainly here	Human resources deficiency and poor infrastructure revealed weak production-management skills
Production engineering: to provide information required to optimize operation of established facilities, including raw material control production scheduling quality control maintenance and trouble-shooting to overcome problems encountered in operations adaptations of processes and products to respond to changing circumstances and to increase productivity	NCC relied very much on KOPEX engineers and experience. KOPEX engineers were unable to cope with both maintenance and more serious technical problems	Spare parts were unavailable; complete system collapsed; finally, government cancelled investment program and KOPEX was sent home
Export development: to find and develop uses for possible output and to channel outputs to market	NCC's effort is unknown	Combination of weak internal capabilities and inadequate export facilities prevented NCC from taking advantage of export potentials

Today, direct-production staff are mostly junior-level and illiterate members. The few professional staff (who mostly supervise) are not directly involved in production; most are in the head office. Although NCC has the negative characteristics of an old establishment, that is, it has an aged work force, the firm completely lacks the positive characteristics of acquired technological competence. Our findings show that the senior staff of the firm are mostly illiterate mine hands, who have no alternative means of livelihood.

Partly as a result of the mining techniques but more as a result of overstaffing at the junior-staff level, productivity growth has in the main been negative. Two factors were readily identifiable:

• The firm, because of its poor financial state, has been unable to pay retirement benefits to those who should have been discharged long ago.

• The miners' union is against the mass layoff of workers.

With the acquisition of new technology, a firm must provide some training in key areas of design and operation, both locally and in the home base of the technology supplier. There was no attempt to systematically train the staff: it seemed that NCC relied solely on "training by operating." With the skill level that NCC is saddled with, it is not surprising that the acquisition process turned out to be a costly experiment.

It is important to mention that the firm had no specific human resources strategy for start-up. A strategy is necessary to reap the benefits of start-up calls for multidisciplinary engineering and technical pools of skills for scheduling, operation, and maintenance. The assignment of start-up teams may well go beyond the routine of ensuring a smooth takeoff. Because they have the knowledge, members of a start-up team tend to assume leadership of future technological investment necessary to make adjustments. Troubleshooting tends to imbue the engineer with the confidence needed to face future challenges. Design formulae, procedures and routines, and theoretically determined specifications may well undergo radical alterations during commissioning and start-up. Active participation in start-up operations contributes to evolutionary technological mastery. Therefore, the neglect of this critical subphase may well have contributed to the observed failure of NCC. Because the firm had no deliberate strategies to capture the experience needed for start-up, perhaps it did not plan to acquire that kind of technical knowledge. The firm may also have been unaware of such a need. If the firm was aware, the human resources structure of NCC leads one to the conclusion that the firm was without the capacity to plan for such an endeavour.

Prefeasibility and detailed studies

In the end, the total capital investment came to $55 million USD. Based on the rated capacity of the mines, the cost per tonne installed was about 90 USD, compared with about 20–40 USD/t in most industrialized countries, including South Africa. This cost excluded training. Detailed studies would have given NCC the information it needed to decide whether to accept this kind of cost and, indeed, whether it was wise to go ahead with the investment. As it turned out, the NCC invested in a costly experiment; worse still, the experiment failed.

Procurement and start-up

During commissioning, there were about 100 Polish engineers on site, but I was unable to obtain details about their qualifications and experience. According to sources at NCC, however, "these chaps were just as confused as we were, or even worse, they could hardly deal with any of the technical problems we had."

Productivity dropped drastically during start-up, which is abnormal. Any serious equipment manufacturer would have ensured that an optimal level was reached during this phase. If a performance-guarantee test shows a failure of the equipment to conform to the expected norms, a manufacturer risks penalty payments and jeopardizes future contracts with the client and with other clients, as well. For these reasons, it is ordinarily expected that productivity will be at a very high level during this phase of the project. It may be argued that structural imbalances and design inadequacies made the job of the Polish engineers more difficult. But this could not possibly explain all the problems. What calls into question the competence of these "experts" was their inability to make adaptations to solve mundane engineering problems. NCC's maintenance records show how small technical problems tended to overwhelm the engineers. Throughout the performance-guarantee period, the system never attained anything near its nominal output, and because NCC had never considered any penalty clauses, KOPEX got away with the nonperformance of its obligations.

Production capability

The start-up of NCC clearly signalled the future production trajectory of the firm. Preparation for commissioning was inadequate because preparation for production management and engineering was inadequate. Not much information was available on the details of quality control and production scheduling: however, maintenance records show that very little was achieved. NCC failed woefully at maintenance and elementary innovations for the following reasons:

• NCC lacked a competent maintenance crew. NCC's technical pool was clearly deficient in quality, not in quantity.

• Compulsive repairs took the place of planned and corrective maintenance (the objective of planned maintenance is to remove technical flash points before trouble occurs).

• The investment package made no allotment for the pervasive technical and structural problems that emerged at commissioning.

• There was a dearth of local spare parts suppliers, and this adversely affected maintenance and procurement.

The market and the views of coal users

• Factor 1 — The major coal users "dieselized" their operations.

• Factor 2 — The overall industrial environment forced major users to cut back on production and, thereby, reduce their consumption of coal.

Table 7. Coal sales (1970–88).
Year	Sales (t)
	Nigercem	NRC	NEPA	Domestic	Export	Total
1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989	— 59 201 120 617 148 730 146 334 140 211 115 121 113 587 126 495 94 413 67 385 n.a. 32 807 51 452 86 110 74 988 90 301 73 996 73 800	22 470 90 915 128 557 74 528 47 309 64 101 69 109 36 225 3 933 1 783 3 464 2 484 3 086 1 857 1 391 1 565 757 296 150	1 830 17 252 13 403 54 142 52 062 56 261 63 401 63 528 43 190 12 117 13 743 10 316 9 809 5 349 5 040 2 648 2 311 1 298 659	2 174 7 785 8 118 8 449 8 994 11 153 10 480 13 021 12 353 6 370 4 577 6 485 8 459 3 871 4 159 4 673 4 608 3 625 3 875	— 4 300 51 649 16 000 18 800 24 599 6 101 13 884 4 500 — — — — 11 080 5 000 39 552 — — —	26 474 179 453 322 344 301 849 273 499 296 325 264 212 240 245 190 471 114 683 89 169 19 285 54 161 73 609 101 700 123 426 97 977 79 215 78 484

However, there was no certainty that with the high capital–output ratio (NCC's capital investment was extremely high), the firm's product would have been competitive on the world market. It is also doubtful that NCC would have had the facilities to exploit that market. This is all conjecture, of course, but there is an even more fundamental misconception pertaining to the potential demand from the domestic iron and steel sector. Enugu coal has a noncoking character and is mainly suitable for steam raising, as in thermal power plants. The use of Enugu coal in steel production would be limited: the coal would have to be blended with coals of superior coking quality. The demand for coal in Ajaokuta is potentially high, but NCC is a long way from being able to meet this demand.

From discussions with domestic users, it appears that the future of coal may depend on the external market. Far from switching to coal, cement companies, such as West African Portland Cement Company have connected their facilities to the major domestic gas line. This trend is likely to be followed by other users. The major attraction of gas is that it is a clean form of energy. In addition, transporting coal far from its point of production adds to the overall cost of the product. These are the major concerns of the potential domestic consumers of coal.

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