Nigeria’s coal-bearing states are emerging as an unlikely test case for the country’s energy transition strategy, as federal officials push to develop coking coal reserves for steel production even as the broader policy architecture treats coal as a fuel to be phased down.
The National Steel Raw Materials Exploration Agency has renewed calls for government intervention funding to develop the Obi-Lafia coal deposit in Nasarawa State, which officials say could reduce Nigeria’s reliance on imported coking coal for the long-dormant Ajaokuta Steel Complex. Agency officials have said the coal exists in large quantities but requires further in-seam exploration and impurity testing before it can be certified for commercial steel use, according to recent statements from the agency’s leadership.
Iron ore accounts for roughly 95% of the raw material mix needed for steel production, with limestone and coal making up the balance, but officials describe coking coal as the missing link in the value chain, since Itakpe’s iron ore reserves cannot be fully exploited without a functioning steel plant to absorb them.
The Lafia-Obi coal field, which straddles Nasarawa and Benue states, is estimated to hold around 500 million tonnes of reserves and has been noted for its coking quality since geological studies conducted decades ago. Kogi’s Ankpa field is believed to hold over a billion tonnes of low-sulfur coal, while Enugu’s historic coal belt, the country’s original coal-mining hub dating to 1915, remains more closely associated with power generation and legacy industrial use.
That distinction matters for Nigeria’s climate commitments. The country’s Energy Transition Plan, which targets net-zero emissions by 2060, positions natural gas rather than coal as the near-term bridge fuel for electricity generation, citing gas’s lower cost and emissions profile. Coal used as an industrial input for steelmaking generally falls outside this framework, which is focused on the power sector.
Analysts note the arrangement could face pressure over time. With an estimated 88 million Nigerians lacking reliable grid access, communities near coal-producing states may eventually seek to direct some output toward local power generation, a shift that could complicate the government’s effort to keep steel-sector coal development separate from its broader decarbonization goals.
