Ethioworld Trading PLC: Coal Mining Feasibility

EthioWorld Trading PLC.
MIZHIGA COAL MINING FEASIBILITY

IN
BENISHANGUL GUMUZ NATIONAL REGIONAL STATE

IN
KAMASHI ZONE, MIZHIGA WOREDA, WIRINKA KEBELEE AT A

LOCALITY OF TIGISHAND ITS SURROUNDINGS
January, 2021
Addis Ababa, Ethiopia
i
ETHIO WORLD TRADING PLC (MIZHIGA COAL MINING ))FEASIBILITY)
This coal mining feasibility study is prepared by group with name as follows:-
1. Mr.
ii
D CHEMICALS PLC (CHIDA COAL MINING FEASIBILITY)
EXECUTIVE SUMMARY
Ethio World Trading Plc is an Ethiopian company engaged in varied business of mining and
manufacturing.
This mining feasibility study for Ethio World Trading PLC Mizhiga Coal is formulated as raw
materials for Cement Factories, Brick factories, others Industries to supply and or use instead of
wood charcol and kerosene fuel. About 30,000tons of Coal per annum is planned to mine.
Location and Accessibility: The Mizhiga coal license area is found in Benishangul gumuz National
Regional State, Kamashi Zone, Mizhiga woreda, and Wirinka Keble’s. It is located at 330km distance from
the capital city of Ethiopia (Addis Ababa) and has an aerial coverage of 3.6826sqkm.
There are digital telephone and postal services in the towns of Nekemte and Arjo Gudatu and towns near the
proposed area, where one can obtain services for telephone, shopping, maintenance and repair for vehicles
fuelling station with 24 hours electric power supply from the National Grid
Population‐ . The majority ethnic group in the zone is the Gumuz people, with significant Amhara and
Oromo minorities as well. Rivers in Kamashi include the Didessa. Yaso is one of the 20 woredas in the
Benishangul-Gumuz Region of Ethiopia, part of the Kamashi Zone.
Contents Table of contents

EXECUTIVE SUMMARY........................................................................................................................................3
1. Introduction........................................................................................................................................ 1
1.1 General......................................................................................................................................... 1
1.2 Location and Accessibility..........................................................................................................3
1.3 Physiography and Drainage........................................................................................................6
1.4 Climate.......................................................................................................................................... 6
1.5 Population settlement and Land use..........................................................................................6
Proximity to Towns and transportation systems.............................................................................................8
Availability of Labor, Utilities and Land for Plant Facilities............................................................................9
1.5.1 Public service and Infra structures..................................................................................................10
1.6 Historical, Cultural, Religious and Archeological Resources:..............................................................10
1.7 Purpose and scope....................................................................................................................................10
1.8 Methodology...............................................................................................................................................11
i
1.9 Data sources...............................................................................................................................................11
1.10 Previous Exploration Works.................................................................................................................12
2. GEOLOGY..................................................................................................................................................16
I. Coal types...................................................................................................................................................16
Structures............................................................................................................................................................16
3. Exploration activities..................................................................................................................................18
3.1 Pitting...........................................................................................................................................................18
3.2 Chip sampling...............................................................................................................................................18
3.2.1 Laboratory result...............................................................................................................................19
3.2.1 Coal Rank Determination of USGS...........................................................................................................33
a. Calorific value < 1000 cal/gm...................................................................................................................33
b. Calorific value 1001 cal/gm -2500 cal/gm...............................................................................................34
c. Calorific value 2501 cal/gm -3500 cal/gm...............................................................................................34
d. Calorific value3500 cal/gm -4500 cal/gm................................................................................................34
Moisture content %, Volatile matter %, fixed carbon %, Ash %, Sulfur %................................................34
3.3 Borehole result & discussion......................................................................................................39
3.4 Measured reserve estimation........................................................................................................................39
V=A x T..............................................................................................................................................................39
4. MINE PLANNING AND SCHEDULE........................................................................................................40
4.2 Mining plan..................................................................................................................................................42
5. Coal Market study........................................................................................................................................65
Objectives of the Investigation............................................................................................................................65
(Part-A)................................................................................................................................................. 66
5.1 Raw coal Demand by Cement Industries......................................................................................................66
5.2. Raw Coal Demand by Brick Factories..........................................................................................................67
(Part-B).................................................................................................................................................. 68
5.3 Wholesale Price of Charcoal.........................................................................................................................72
5.4 Wholesale Price of Coal Briquette................................................................................................................72
5.5 Government Expenditures and Taxes...........................................................................................................73
5.6 Investment Costs of the Project....................................................................................................................74
5.6.1 Briquetting Machines and Equipment..................................................................................................75
5.7 Locations of Factories and Land Rent..........................................................................................................77
5.7.1 Location of Coal Carbonization Plant..................................................................................................77
5.7.1 Manpower Requirement for Briquette Production and Distribution....................................................78
TBI = 113.4 x 106...............................................................................................................................................80
Income tax = 35%...............................................................................................................................................80
Tax payable = 39.68 x 106 ETB..........................................................................................................................80
ii
D CHEMICALS PLC (CHIDA
6 COAL MINING FEASIBILITY)
Annual cash inflow = 73.72 x 10 ETB / year....................................................................................................80
5.8 Market Strategy Assessment.........................................................................................................................81
5.8.1 Self Marketing (Retail sales)................................................................................................................81
5.8.2 Outsourcing Product Sales(Bulk Sales)...............................................................................................81
5.8.3. Technology of Coal Briquette Production Process....................................................................................82
5.8.4 De-............................................................................................................................................................. 83
6 Machinery and Equipment requirements..........................................................................................................84
Camp structure & set up......................................................................................................................................85
Capital expenses (A)......................................................................................................................................108
Table. 21.Capital expenses (Camp set up cost).................................................................................................108
7. Organizational Structures...........................................................................................................................111
8.1 Manpower and Salary Requirement of the Project......................................................................................112
Machinery and equipment required...................................................................................................................113
8.2 tools and work shop equipment’s................................................................................................................113
8.3 Pre – Operational Cost................................................................................................................................113
Table. 29 Operational cost.................................................................................................................................113
10.2 Recommendation...................................................................................................................................117
i
Resource Appraisal‐ according to the chemical analysis results the quality of coal is classified
into lignite to sub-bituminous stage.
Considering various allowances towards the correction of error in e s t i m a t i o n ,
Cavity, voids, moisture and mining losses for measured, reserve categories, planned to produce
30,000tons of coal from eight mining blocks. Coal reserve of
3,480,988 metric ton is calculated. Production capacity 30,000tons of coal therefore mine life of
the project is expected to be more than 8 years.
Market ‐ coal is the sources of energy, so Ethio World Trading plc has commenced the c o a l t o
produce Mizhiga coal. The need for improved housing, utility consumption and infrastructure has
also increased similarly. The coal market in Ethiopia shows a huge gap between demand and
supply in the past years and the Company wants to plan for replacement of wood charcol and
kerosine fuel by natural Ethio World Trading plc Mizhiga Coal.
Production plan‐ coal production capacity is designed for 30,000ton per annum operating
for 100 working days per year. The proposed coal processing plant is expected to produce with
60% capacity starting from the date of commissioning, 70% second year and attain full capacity in
the third year.
Thus, the coal mine would have a capacity of mining 30,000tons annually including mining loss
and hauling losses. To achieve this, the mine is planned to
work for 100 days per year in 1 shift of 8 hours and 300tons per day. Considering the measure
category of resource and the annual demand of coal.
Finance ‐ the proposed mining project requires ETB more than 10 million total
ii
Investment capitals to coal and supply to users in the country.

The mining operation shows a profit starting from the first year. The project is financially viable
with IRR of 6% and a net NPV of 3,000,000.00 ETB in the 8 year operation. The proposed mining
project will repay the investment in two years and with a discounting rate of 7%. The investment
funds are expected to be generated mainly from the Investor and bank loans.
iii
CHEMICALS PLC (CHIDA COAL MINING FEASIBILITY)
iv
v
CHEMICALS PLC (CHIDA COAL MINING FEASIBILITY)
vi
ETHIO WORLD TRADING PLC MIZHIGA COAL MINING ))FEASIBILITY)
1. Introduction
1.1 General
Coal is the most widely used primary source of energy in the world. More than 30% of the worlds
electricity is generated by coal fired thermal power plants and produces more than 70% of the steel
industries. It also covers about 6% of all domestic (cooking) fuels in the world, including the most
developed and the fast developing nations of the world. Current study reports indicate that, about
500 million of the global population depend upon coal for cooking. These are mainly people living
in coal resource rich countries such as China, India, Indonesia, etc.
Due to the current price increment of heavy fuel oil (HFO) that has reached USD 850 per ton, the
government of Ethiopia is on the process of importing coal from abroad in order to supply to
enterprises such as cement and Brick manufacturing plants, and thereby reduce or if possible stop
the import of HFO. The development of indigenous coal resources is also encouraged by the
government than any time before.
Likewise, most Ethiopian urban households use charcoal and kerosene for cooking, the cost price
of which has tremendously increased and became unaffordable for most; mainly, for the low
income sector of the urban society. Therefore, it is becoming a very serious economic and social
problem for the country to continue in the same pattern of energy supply. The retail price of
charcoal in Addis Ababa is the highest in the country and is about ETB 8000 per ton.
Thus, the Ethiopian Government seems to be desperately concerned about the existing energy
crisis of the country. One of the measures currently taken by the Ethiopian Government is the use
of alternative energy resources and the import of cheaper fuels such as coal from abroad. By
substituting such costly sources of energy as petroleum products and environmentally devastating
fuels as charcoal, with relatively cheaper resources, it is assumed that, the following significant
economic and social benefits could be achieved. Using coal fuels for industrial and domestic
applications has many advantages in Ethiopia; some of these are:
Ethio World Trading PLC has a coal exploration license in Benishangul gumuz Mizhiga locality.
1
NING AND CHEMICALS PLC (CHIDA COAL MINING FEASIBILITY)
2
The company has involved in detail exploration including drilling activity, advanced stage of
exploration since the second year renewal exploration period field activity.
Besides the planned borehole location at the beginning of the second year renewal fiscal year a
newly located borehole are planned based on the observed supporting subsurface information after
the drilled boreholes.
The objective of this feasibility study is to start coal mining and supply to local coal consumers
like cement factories, brick factories etc.
The survey area, Mizhiga coal, has received detailed geological and geochemical works that
includes mapping, pitting, trenching, and sampling (from pits, trenches and stream sections).
The Mizhiga coal licensed area has a total area of 3.6826 km2 out of this nearly 3sqkm area
selected for mining.
1.2 Location and Accessibility
The Mizhiga coal license area is found in Benishangul gumuz National Regional State, Kamashi
Zone,Mizhiga Woreda, and Wirinka Kebele’s.
It is located at 330km distance from Addis Ababa and has an aerial coverage of 3.6826km 2.
3
There are also foot paths to cross every part of the study area especially in dry season, but
in wet season the land gets muddy and elephant grass starts to grow up and makes the
journey too much difficult.
4
Fig. 1 Geological map of location
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1.3 Physiography and Drainage
Physio graphically the project area is characterized by moderately dissected high topography, rugged ridges and
flat area on most of the area. The rugged ridge and hills are formed of more resistant Precambrian basement
rocks which are intruded by granites and the like bodies.
The location of the proposed project area forms an elevated topographies forming ridges form flat to low
gradient terrain. Generally elevation of proposed coal exploration and its surrounding area varies from 892m to
2395m above mean sea level. All perennial streams in the area are draining towards the Didesa River from north,
southeast, southwest and northwest of the applied project area. Drainage networks within the application area
are more or less seasonal; however, rivulets and small springs around the ridges are available during the dry
period of the year. Most of the above mentioned streams and rivers are the major and important tributaries of the
Abay River (Blue Nile). Numerous tributary small creeks and streams are joining the above major streams from
different directions and collectively form dendritic drainage pattern.
1.4 Climate
Climate, Vegetation and Soil
The climatic condition of the project area has a tropical climate with a rainy season from June to September and
with dry season from October to May. Annual precipitation ranges from 1050mm to 1530mm. Average
maximum and minimum temperatures are 28-400C and 20-250C, respectively (Encarta, 2009).
The project area is dominantly covered by shrubs and savannah grass- land with some bamboo trees along the
streams and rivers. The area is characterized by tropical dry, savanna grass land and sparsely vegetated by small
trees and bushes and the vegetation coverage rate is comparatively low. Almost all parts of the study area are
covered by the layer of soils. But, in some places there are vegetation covered. The dominant vegetation in the
study area is bushes, which is mainly found on the meta-volcanic rocks.
1.5 Population settlement and Land use
Kamashi zone is located in the western part of the country and it is 240 Km south of Asosa town which
is the capital of the region. The zone is widely sharing its border with eastern and western Wolega zone
of Oromia National Regional State, Asosa Zone I west and Amhara Region in the north. The total
population of the zone is 154,629 and it has a size of 10,069 Sq.Km.
Kamashi is one of the three Zones in the Benishangul-Gumuz Regional State of Ethiopia. It covers part
of the southern bank of the Abay and the valley of the Didessa Rivers. The Zone is bordered on the
south and east by the Oromia National Region State, on the west by the Asosa and Sudan, and on the
north by Metekel and the Amhara Region, which lie on the further bank of the Abay. The majority
6
ethnic group in the zone is the Gumuz people, with significant Amhara and Oromo minorities as well.
Rivers in Kamashi include the Didessa. Yaso is one of the 20 woredas in the Benishangul-Gumuz
Region of Ethiopia, part of the Kamashi Zone.
The settlement condition of the coal exploration application area is medium populated. Agriculture and
mining is the dominant economic activity in the zone and proposed exploration area and only 3% of the
population engaged in trading and employment.
Kamashi Zone is one of the most productive and surplus producing zone in the region. The main cereals
produced are sorghum, maize, teff and others.
7
Proximity to Towns and transportation systems
The nearest city is Arjo Gudatu (population--) located south of the property and is connecting
Wirinka by all-weather gravel road.
8
Availability of Labor, Utilities and Land for Plant Facilities
Labor will be recruited mainly from throughout Ethiopia. The workforce will live mostly in
wirinka. The surrounding communities of Gumuz and oromo may also house workers.
A 1KV transmission line is crossing the property and is planned to be taken from this power grid.
Water for coal beneficiation, general operations, shower and other domestic uses will be supplied
through on site from Shundi stream.
As confirmed by the in situ site inspection, there is adequate, level ground to accommodate the
required surface facilities, coal processing plant, and truck load out. The existing gravel surfaced
access road and proposed coal transportation road will require improvements.
9
1.5.1 Public service and Infra structures
The major infrastructures such as clean water supply, education (elementary and secondary
school), health center, electric supply, telecommunication, road accessibility (transport service to
the neighboring localities), etc are mostly limited to Arjo town. The nearest kebele, Arjo and
Wirinka contains both electric power and water supply and located at 35km distance from the
license area. Due to the flat terrain of the license area and highly elevated topography of the
surroundings, many streams recharge to the surface, so that water will not be a problem for the
proposed coal mining sites.
1.6 Historical, Cultural, Religious and

Archeological Resources:
There is no reported historical or archeological resource in the project area. During the field visit
the team do not encountered site of historical, cultural, religious and archeological importance
located near to the project area. Enquiries to residents in the area have indicated that there are no
known sites of historical or archeological significance in the vicinity of the proposed coal mining
project site. Besides religious practice, the majority of the inhabitants practiced Ethiopian
Orthodox Christianity with 95 percent.
1.7 Purpose and scope
The purpose of this coal mining feasibility report investigates the feasibility of surface mining of
coal deposits in Wirinka coal.
To study the problems to be encountered in the mining and reclamation of Wirinka coal deposits;
to design surface mining systems to improve coal extraction, overburden handling, and
reclamation; and to subject such conceptual mining systems to engineering/economic feasibility
and environmental impact analyses.
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1.8 Methodology
Methodology for the study of the Wirinka coal deposits consisted, in sum, of the following;
 A compilation of the environmental aspects of Wirinka coal was made.

 A study was conducted of factors which would constrain the development of Wirinka coal.
 The areas with the greatest potential for surface mining were determined.
 The most appropriate systems for mining and reclaiming the Wirinka coal fields were
developed.
 Capital and operating costs for demonstrated and hypothetical coal resources were
estimated. These costs were developed for mines, the transportation systems and the related
infrastructure.
 The estimated coal costs from Wirinka were compared with estimated costs of competing
coals.
1.9 Data sources
Data was gathered in the following areas of interest,
 Geology
 Environment
 Marketing and transportation
 Mining equipment and technology
 Reclamation
This data was obtained from the following activities,
 Previous exploration reports and literature searches.

 Field observation of Wirinka coal deposits.
 Discussions with individuals knowledgeable in the areas of interest,
 Contacts with equipment manufacturers
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1.10 Previous Exploration Works
It is well known that different scholars have made various studies related to geological and regional geology,
geochemical and structural mappings of the western Ethiopia. Assessments for mineral resources (at various
scales) have been also made and presently going on within the basement terrains of western Ethiopia, in
different areas since the last decades.
Mineral exploration in the Western Ethiopian Shield (WES) started in the early 1900. Geological
investigations known in publications started in the 1930s. To mention some of these works: Cuisinier (1933);
Hess et al. (1937) and Desio (1940a, 1940b). Among these, Desio (l940a) produced a geological map of the
region including the Gimbi area at a scale of 1:1,000 000. Successively Dainelli (1943) and Mohr (1962) used
Desio's data of WES to compile their maps of the Horn of Africa at 1: 2,000,000 scale. Kazmin
(1973),Merlaetal. (1973) and Mengesha et al. (1996), later produced maps of Ethiopia at the same scale.
Desio (1940a) has subdivided the WES into gneiss, low-grade metasediments and metaplutonic rocks. He
also identified the post-tectonic intrusive, but the ultramafic body of Tullu Dimtu was not indicated on the
map, despite its conspicuous nature and big dimension.
Hunting Geology and Geophysics (1969) prepared map of the WES at a scale of 1: 500,000, mainly based on
the interpretations of aerial photographs with limited field controls. This research group identified five major
units. These are from the oldest to the youngest: the Gneiss Group, the Schist and Amphibolite Group, the
Older Intrusive, the Younger intrusive and, the post Precambrian Sediments and Volcanic.
It was suggested that the Schist and Amphibolite Group was deposited in a single geosynclines of the older
Gneiss Group. Within the post Precambrian volcanic, the plugs were assumed to be of Quaternary age.
Amenti (1989) reconstructed the tectonic history of the WES based on the type of deformation and pulses of
magmatic intrusions. He established four episodes of folding.
Recently according to the communication made between the Federal Democratic Republic of Ethiopia and
the People’s Republic of China, confided by Ministry of Commerce of China, an Ethio-Chinese geological
expert team was sent to make a reconnaissance geological investigation in Ethiopia during the period from
January 2008 to June 2010, by China Geological Survey (CGS).
Besides, the above works there are small scale coal miners as company and cooperatives in the area who got
mining right from regional government.
12
The works of the aforementioned geoscientist, government institutes and small scale miners in Ethiopia and
in the proposed area and its surroundings could make Ethio World trading PLC initiated to conduct
reconnaissance trip in the area.
The implication of the review of the previous works for this exploration work program is mentioned as
followed:
 It helped us to select the proposed area for further exploration study

 It helped us in identifying the geology and mineral occurrences of the area
 It indicates us the prioritize areas where the geological, geochemical explorations needs further detail
study
 And overall situation of the study area including baseline data’s.
Therefore, from the field visit observation, small scale mining activities and previous works assessments
Ethio World trading PLC decided to apply for coal exploration licence in the area for further detail
investigations. Types by era summarized below.
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NING ANDMethods
Table 1 Exploration CHEMICALS PLC (CHIDA COAL MINING FEASIBILITY)
Year Company Drill Exploration Activity

Holes
14
2019 Ethio World Trading PLC Detail geological mapping, field

sampling, trenching and pitting

sampling, pitting and vertical
electrical sounding survey.
2020 Ethio World Trading PLC 2 Detail geological mapping, field

sampling and Core drilling

sampling, pitting, ground magnetic survey
and reserve estimation.
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2. GEOLOGY
2.1 Regional geology
I. Coal types
As stated in the previous studies the coal types in the license area are expected to be humic in
nature due to the remains of observable leaf, root and steam structures in the coal surface. The coal
seams in the study area are mainly classified based on the visual physical appearance (color,
foliation degree, weight etc), based on this we found three types of coal layers (shaly coal, Coaly
shale and pure coal). Shaly coal is highly fissile, highly foliated, easily breakable, weighs high and
brown to reddish with black associated color and found mostly in the top part of the three coal
layers. Coaly shale is Massive to weakly foliated, dark in color, relatively weigh low and fond in
the middle part. The pure coal is mostly found in lower part and it is deep black in color, shiny,
vitreous, concoidally fractured, light weight.
Structures
2.1.1 Faults
There is N-S trending normal faults that are responsible for the graben formation and appear to
have major linear features in the area.
16
17
3. Exploration activities
In Wirinka coal exploration different activities were conducted this includes geological mapping,
pitting, chip sampling, geophysical survey and drilling. Geological mapping and related
exploration activities have started at 3.6826 sq.km and at the present moment the license area is
about 3.6826 sq.km, from this total area seven targets were delineated, with total areal coverage of
3 sqkm for mining.
3.1 Pitting
Pit location and description

From different year’s field survey coal exposures were noted in the license area and the coals are
clearly seen along dissected stream sections. As results more than 40 pits are prepared that has a
total depth of 42m i.e more than the planned depth. From both pits and stream sections 11 samples
are taken for laboratory analysis. The description of the pits and stream sections were attached in
the appendix part.
3.2 Chip sampling
The coal in the study area is mainly found on the low part. Most of the upper layers covering
(both Volcanic and sediments) are eroded and the coals are seen clearly exposing to the surface,
but mostly the coal seams are seen more clearly on the stream part. Out of the 56 streams in the
study area about 33 streams showed an indication of coal occurrence having different thickness
and physical characters. Finally 25 rock chip samples are taken from the selected stream for
laboratory proximate analysis.
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3.2.1 Laboratory result
Rock-chip samples were collected from the stream section where coal bearing indications are
observed. At each sampling site, any information regarding the nature of sample, sample site,
lithology etc are collected. Each sample was described at the sampling site, packed in the sample
bag and given a sample number. Finally the collected field samples (29 samples) are analyzed by
the geological survey laboratory to determine Moisture, volatile matter, fixed carbon, Ash,
calorific value, sulfur and specific gravity.
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Table 2 Chip samples laboratory analysis
S/N Sample no Sample location in UTM Altitude Calorific Average

o value (cal/gm
X Y Z ) calorific Value
(cal/gm)
1 Ch-C-1-1 0258908 0801191 1063 3653.12
2 Ch-C-1-3B 0259262 0800950 1073 2855.09
3 Ch-C-1-18 0259410 0800626 1086 3641.84
4 Ch-C-1-17 0259439 0800404 1090 2415.37

1000-1150 2963.58
5 Ch-C-1-16 0259551 0799902 1126 1961.75
6 Ch-C-1-13 0258602 0799527 1134 1795.98
7 Ch-C-1-15 0258519 0799357 1138 3546.26
8 Ch-C-1-6A 0258201 0799307 1142 2187.75
9 Ch-C-1-6B 0258201 0799307 1142 4023.54
10 Ch-C-1-20 0259788 0800257 1145 2351.01
11 Ch-C-1-14 0259780 0799625 1148 4167.71
12 Ch-C-1-5 0257963 0798747 1160 1150-1200 <24 <24
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KRIPTO MINING AND CHEMICALS PLC (CHIDA COAL MINING FEASIBILITY)
30
31
RIPTO MINING AND CHEMICALS PLC (CHIDA COAL MINING FEASIBILITY)
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3.2.1 Coal Rank Determination of USGS
If fixed carbon is greater than 69% the coal rank is determined by fixed carbon e.g Anthracite
86 – 98 fixed Carbone; Bituminous coal 69 – 86% fixed Carbone. The coal with fixed
Carbone less than 69% are ranked by cal. value.
Sub bituminous A =10500-11500; B=9500-10500; c=8300-9500
Lignite A =6300-8300; B=6300
Calorific (Heating) value usually expressed in cal/gm or Btu/lb to change cal. Value into
Btu/lb multiply by 1.8.
From this USGS coal classification our coal falls in Sub Bituminous C / Lignite A and B.
The laboratory analysis result of the calorific value indicates an average value of
2963.58cal/gm (5334.44 Btu/Lb) and grouped in to lignite coal rank. These coals seems are
stratigraphically situated between the 1000-1150 masl that classified in to lower coal group.
The layer found between the altitude differences 1100-1200 masl, showed a calorific value of
<24 cal/gm (23.2 Btu/Lb) and taken as unconformity that separates the upper and lower
group.
The coal seams found at an altitude between 1200-1400 masl has an average calorific value
of 2230.91cal/gm (4015.64 Btu/Lb )and classified in to lignite AB coal rank.
According to the laboratory result the samples divided in to four categories depending on
calorific value as described below.
a. Calorific value < 1000 cal/gm
There are three samples that showed calorific value less than one thousand, though they are
taken from one stream section of different layer. Two of
33
33
them have calorific value 909.87cal/gm and 861.46 cal/gm respectively. The less calorific
value may be due to high weathering effect and contact with the water bodies and more
calorific value is expected if deep test drilling has done. The remaining one sample showed
calorific value Less than 25 cal/gm, This may due to the presence of extra impurities
intercalated and in contact with the coal layers, its near appearance to the top surface part,
and best result is expected if deep drilling is done because the chip samples taken from the
surrounding streams showed a better Calorific value result. This stream is relatively found on
the central part of the study area.
b. Calorific value 1001 cal/gm -2500 cal/gm
This category contains 16 chip sample results and are distributed in NW, NE, Central and
Southern part.
c. Calorific value 2501 cal/gm -3500 cal/gm
There are about 4 samples that showed a calorific value between 2500-3500 cal/gm located in
SE, NE and southern part.
d. Calorific value3500 cal/gm -4500 cal/gm
Those are the highest calorific value range classes relative to the other categories and contain
about 8 samples. They are distributed in NE, SE and central part of the study area.
Generally the NE, SE and the central part of the study area contains good calorific value
result and on the basis of this data seven different blocks were delineated and reserve
estimation was also calculated for each block (Fig.6).
Moisture content %, Volatile matter %, fixed carbon %, Ash %, Sulfur %
The lower coal group has Moisture content 13.5%, Volatile matter 23.957 %, fixed carbon
24.97 %, Ash 31.18 %, Sulfur 0.19 % in average.
The marker bed has Moisture content 11.86%, Volatile matter 14.88% , has no fixed carbon,
Ash 74.77 %, Sulfur 0.02 % .
The upper coal seam group has moisture content 11.78%; Volatile matter 17.68%, fixed
carbon 16.88%, Ash 43.07%, Sulfur 0.13% in average
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(FEASIBILITY)
Table.3. Comparisons of coal rank determination of Australian and Chinese with Kripto Chida coal
Country ash lim% sulphur % fixed carbon% calorific value Coal rank
standard
Australia < or=33 < or=0.33 F.c>or=69 - Anthracite

standard
86-98
69-86 - Bituminous
F.c <or=69 10,500-11,500 sub Bituminous A
9,500-10,500 sub Bituminous B
China standard <or=44 <or=0.33 >or=69

For F.c or=69
10,500-11,500
86-98 Anthracite
9,500-10,500
69-86 8,300-9,500 Bituminous
6,300-8,300
<6,300 sub Bituminous A
sub Bituminous B
Wirinka, mizhiga 46.83% 0.18% <69% 7615.8(maximum) sub Bituminous C
4585.66(average) Lignite A
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Table 4 Geographic co-ordinate

Corner point northing Easting
1 09° 10' 33.96" N 036° 06' 40.58" E

2 09° 10' 54.21" N 036° 06' 41.21" E
3 09° 10' 53.33" N 036° 08' 52.61" E
4 09° 11' 59.40" N 036° 08' 39.76" E
5 09° 11' 59.09" N 036° 08' 52.23" E
6 09° 10' 35.04" N 036° 09' 15.64" E
7 09° 10' 34.02" N 036° 06' 40.52" E
37
38
3.3 Borehole result & discussion.
From field observation and test borehole data the coal seams are found at a depth of 11m (in
borehole-1) and at a depth of 12.70m (in borehole -2) and we also founded from pits after a
few meter depth and mostly exposed on stream sections, This indicates that the coal is near to
surface and the overburden is so thin that open pit mining is ideal to be recommended.
So far the company has accomplished two boreholes having an aggregate sum of 305 meters
depth. The first drilled bore hole BH-1 is located at lower elevation by about 24m relative to
bore hole BH-2
3.4 Measured reserve estimation
Parallel to geological mapping a number of pits are prepared in all the three blocks and as
usual the coal bearing sediment is assumed that the contact between the coal bearing
sedimentary units and the adjacent rock units, so that, the surface area covered by coal
bearing sedimentary units computed. Finally multiplying the surface area by the coal seam
thickness, the total volume of each block is estimated.
The coal volume evaluation was assessed qualitatively by using the reserve calculation
parameter that is indicated in the following formula.
V=A x T
V→ Total reserve (m3)
A→ seam coverage area (m2) T→
Seam thickness (m)
 The volume calculation has been made for each block as shown below
Table 5. Coal potential target blocks with their respective reserve.

Block Area(Sq m) Thickness(m) Volume(m3)
Block_A1 76,943.64 7.73 594774.3
Block_A2 160,524.00 7.73 1240851
Block_B 250233 14.55 3640890
Total 5,4764,515.3
An average specific gravity of 1125 kg/m3 is taken(see Appendix-3) Hence the total coal
size is computed and it is equal to 3,923,954,126 kg

which is equivalent to 3,923,954 metric ton
39
4. MINE PLANNING AND SCHEDULE
4.1 METHODOLOGY USED FOR MINE DESIGNING AND PLANNING.
Preliminary coal resource estimation made based on the two drilled hole and a composite
map of surface mapped geology and magnetic field data, it is most economical to go by open
pit mining method. The open pit mining method with conventional dumper & shovel
combination will be most suited.
In the premative work using dozer and grader to prepare approach road. Select the stock pile
area which suited to all coal block, keeping easy logistic solution.
It is plan to mine out individual block in the beginning and later on by regular update on
exploration result and continuity of coal seam; coal block may merge into each other.
During the analysis of geological data it is inferred that the stripping ratio will be in the scale
1: 2 to 1: 3. Keeping in view of capital investment and equipment acquisition, coal
production target is fixed at 30,000 ton per year (1st year). During the mining excavation if
coal seam result are found very encouraging in terms of calorific value as well as thickness of
coal seam and uniformity in it formation. The company may decide to go for larger scale
mining (capacity excavation) after proper approval from ministry of mines and governmental
of Ethiopia authorized and competent authorities.
Taking in to consideration the last consumption, present and future demand of coal
production, demand and supply gap has been estimated and tabulated as shown below.
40
Table. 6 Eight year coal production plan
Y-1 Y-2 Y-3 Y-4 Y-5 Y-6 Y-7 Y-8
Coal 30000 30000 30000 30000 30000 30000 30000 30000
Development 12000 12000 12000 12000 12000 12000 12000 12000
41
4.2 Mining plan
Total selected block in number priority has been set according to the calorific value ,
thickness of coal seam, and logistic solution for stock pile as well as waste dump position.
It is plan that high calorific value coal is blended with low calorific value coal to conserve the
coal reserve and more economical use. It is planed that in the pioneer period of mining start
from block A (A1 & A2), B,C,D and E first few years. During the pioneer period need more
training and acquaintance
With mining culture the local tribes align in industrial behavior.
It is planned to work by open pit mining method with dumper and shovel combinations. The
bench height is designed 5m and bench burm designed 3m. with bench angle keeping
35degree. The width of the haul road is designed 25 m with gradient of 1 in 10.
42
5. Coal Market study
The study has been incorporated the possibility of supplying and marketing the coal in its raw
form(Part-A) for industries such as cement, brick manufacturing, beverage, boiler, food industries
and liquor plants in and around Addis Ababa.
The market assessment has also covered (Part-B) on the acceptability and utilization of the coal as
domestic (household) fuel in Addis Ababa, which is the main market centre of the country.
At present, both the household and the industrial sectors are bound with serious energy problems,
due to the very high cost of petroleum products and the scarcity of other energy sources such as,
firewood and charcoal. The use of charcoal has also contributed to the devastating environmental
phenomenon in the region.
This study has integrated not only the market of coal rather comprehensive areas including the
costs of other fuels verses the possible costs of coal processing and briquette manufacturing as well
as the cost of raw coal supply to the industrial sector as alternative market option in order that the
company has the choice to decide areas of investment.
Objectives of the Investigation
The long term objectives of the project is the development, i.e. mining, processing and marketing
of Wirinka coal resource and bring financial and economic benefits for the enterprise and the
people who are in serious demand of alternative energy.
Industries such as cement plant lime factories, brick manufacturing and others in Ethiopia are
gravely in need of coal due to the current high fuel oil price rate. Investigating the benefit of coal
mining and raw coal marketing to the industrial sector is also one of the objectives of the project
Therefore, the main objective of
65
this investigation is to study and indicate the market demand and size, the investment costs, the
inputs and cost aspects of Wirinka coal development for utilization by the domestic and industrial
sectors and promote to a useful and profiting project.
Additionally the Ethiopian urban residents are badly in need of alternative household fuels mainly,
affordable energy sources that can ease their domestic energy problems and the existing cost of
living particularly for the low-and middle income sector of the population.
(Part-A)
5.1 Raw coal Demand by Cement Industries
Muger Cement Factory is producing clinker by burning heavy fuel oil. The enterprise is on the
process of modifying the burners of the rotary kilns into solid fuel (coal and/or pet coke) firing
type. The Project manager of the respective factory is searching a supply of over 90,000tons of
local coal starting from January 2013.
The second cement factory of Muger Cement Enterprise that will be commissioned in 2014 is
designed to use coal, pet coke and heavy fuel oil, and requires about 100,000 tons of additional
coal.
The energy content of coal for cement firing must be abou t 6,300 kcal/kg and ash
content of about 33%, while that of wirinka surface coal is about 4,500 kcal/kg,
and about 40% ash content. Thus, wirinka Coal with the assumed calorific value and ash content
becomes a candidate fuel only when blended with higher quality coals or with pet coke for cement
firing. Using coal with ash content up to 33% is acceptable for cement firing according to the
Muger Cement Project manager and expert.
Table. 7 Summary of raw coal demand by Industries
Coal Demanding enterprise Demand in tons Demanding period

(time)
Muger Cement 90,720 2013

100,000 2015
HUANGSHAN (Modjo) 25,000 Any time

Cement
66
Burayu & Ethio-Bricks 15,00 Immediate
Factory
5.2. Raw Coal Demand by Brick Factories
Ethio-and Burayu Brick Factories are government owned enterprises that have been using furnace
oil during the time it was affordable.
According to the interview with the general Manager of these state owned brick factories, coal is
acutely demanded in all brick factories in the country. However, the supply from Ethio-Pakistan
Coal Mining and Marketing Enterprise hardly covers a very tiny portion of the demand. No brick
factory can afford to buy furnace oil at ETB15.00 per litter and produce construction bricks and
sell at Birr2.00 per piece. Thus, both Burayu - and Ethio-Brick factories are currently burning
wood logs, coal from Ethio-Pak., used lubrication oils, and used tiers, coffee parchment briquettes
imported from areas south of Hawassa and edible oil cakes simultaneously as are available.
The main problem of the enterprises is the sustainable supply of fuel to burn the bricks that
consumes more than 60% of the total enterprise income. Coal supply by Ethio-Pakistan Plc is not
reliable and sustainable; yet, the price of coal which was about Birr500.00/ton at the beginning
(two years back) has now become Birr1,562.00 per ton, excluding the cost of transport (which is
Birr1.40 per ton per km) and makes the total supply cost about Birr2,200.00 per ton. Moreover, it
was not only the price of coal that mattered for them, rather the availability and sustainability of
the supply.
The cost of wood which both brick factories burn in the previous Ethiopian fiscal year was slightly
higher than Birr 8 million and is expected to increase this year.
67
(Part-B)
i. Coal Markets
Ethio World Trading plc has assumed to start production of 30,000 tons of coal briquettes per year
for marketing in and around Addis Ababa City. This report shows and confirms that carbonized
coal briquettes can substitute charcoal and kerosene for utilization as cooking fuel for two
significant reasons; which are, the energetic quality and durability of the briquettes when compared
to charcoal and its reduced price when compared to kerosene and charcoal. The prices of kerosene
and charcoal are steadily increasing for the past several years and is still rising infinitively and is
becoming unaffordable for most. The urban households that comprise about 65% of the Addis
Ababa residents lay in the lower income group and poorer sector of the society that has difficulty
of surviving with the monthly wage they earn. Purchasing cooking fuels such as charcoal and
kerosene has already become a matter of day to day discussion for almost all citizens.
These sectors of the Addis Ababa residents account to about 3.4 million people, about 560,000
households. With the assumption that a family (household) may consume 1kg of coal briquette per
day, i.e. 365 kg per year, 100,000tons of coal briquette may cover only 273,973 households per
year and falls much lower than reaching the whole needy households of the capital city, Addis
Ababa.
ii. Costs of Coal Briquette Production
The production costs of coal briquette was calculated as ETB2,690 per ton and covers all
costs including material, transportation, processing and distribution costs.
68
iii. Retail and whole sale prices of charcoal in Addis Ababa
The output of this investigation reveals that one kilogram charcoal is sold at ETB 7.500 in
kiosks and along the streets of Addis Ababa. Likewise, charcoal is sold in bags of about
20kg at ETB100.00 making the wholesale price about ETB 5,000.00 per ton.
iv. Price estimation of coal briquettes in Addis Ababa
It was estimated and calculated that coal briquettes could be sold at a retail price of
ETB5000.00 per kg (i.e. ETB2.5 less than charcoal price). Likewise, a ton of coal briquette
could be sold at a whole sale price of ETB4,000.00.
v. Costs of the project
Wirinka coal briquette project insures the following costs.
 Total investment cost of the project : ETB10million

 Total operation cost of the project per year: ETB15million
vi. Total annual sales of coal Briquette

It was estimated to sell the briquette at ETB4,000.00 per ton to whole sellers by making a
deduction of ETB1,000.00 per ton from that of charcoal wholesale price. It was so assumed
to give price advantage for the poor and lower income sector of the society.
vii. Payback period of the coal briquette project
The payback period of 100,000 tons of coal briquette production and marketing was
calculated as 0.8 year (9.6 months)
viii. Raw coal Marketing (alternative option)
69
Mining and raw coal marketing has been investigated as a separate but alternative option
for the company. Thus, the following costs are calculated and identified.
Total cost of operation ETB7, 258,000
Total sales of raw coal ETB56, 200, 00
ix. Payback period of raw coal project
The payback period of coal mining and raw coal marketing is 0.707 year (6.5months)
In both cases all possible government taxes and royalty fees were considered and paid.
x. Market strategy
For different reasons such as constraints of land rent at many palaces in the capital city and
employment of numerous personnel on each site, it has been opted to conduct wholesale
operation than retail sales.
xi. Environmental and social impact of the projects
Due to the location of the coal resource site and the pattern of population settlement, coal
mining and carbonization in the area impose very little or insignificant environmental and
social problems on the human and animal population of the area. It is also assumed that the
sulphur content of the coal will be about 1% or less of the coal and contributes no
remarkable effect on the whole process of the project.
In general, the investigation has identified that raw coal is currently very much demanded
for industrial enterprises such as cement and bricks factories.
70
The production of coal briquettes and marketing will not only benefit the investor; but also
the large majority of the population that is currently aspiring the supply of cooking fuel like
coal briquette at affordable price.
 Domestic and Industrial Fuel Prices Reduction
The price of charcoal has tripled in less than two years. Its present retail price has reached
ETB7,500 per ton and is becoming unaffordable for the lower income sector of the
Ethiopian urban population.
Ethiopia is a country without any petroleum resource of its own, while other countries such
as Sudan, Chad, Niger, Uganda etc. are currently enjoying their petroleum resources.
Therefore, it becomes necessary for a country such as Ethiopia to exhaustively utilize its
own natural energy resources; of which carbonized coal briquette utilization will be one of
the main options.
Likewise, the price of kerosene (cooking fuel used by the middle and lower income group
of Ethiopia) is also becoming unaffordable due to the price increment on all commodity
materials and the high financial inflation rate of the country. Therefore, all Ethiopian urban
population are in crucial demand of affordable domestic fuel supply. It is assumed that the
development and supply of coal based household fuel will tremendously ease this current
cooking fuel problem.
Raw coal will also fully or partly substitute HFO that is widely used in energy intensive
factories such as cement and brick industries.
5.2.3.1 Costs of Coal Production

In order to determine and identify the retail and wholesale prices of coal briquettes, all costs
incurred upon the production of coal briquettes must be identified and calculated. The following
are the total costs of coal briquette production.
Table. 8 Costs of coal briquette production

Coal – 1.4 tons required per ton of briquette (mining cost)3 ETB 986/ton
Carbonized coal transport to Addis Ababa ETB 700/ton
3
Current cost of open pit mining is estimated as USD40/to: ETB704/ton
71
Total Coal processing costs (estimated) ETB 600/ton
Briquette distribution to wholesalers in Addis Ababa ETB 60/ton
Mark up (15%) ET3 37/ton
Total costs ETB 2,690/ton
5.3 Wholesale Price of Charcoal
Wholesale prices are significantly less than the retail prices. Almost all charcoal wholesalers
around Addis Ababa City sell 100kg charcoal for ETB500.00; thus, the wholesale price of charcoal
is ETB5,000.00 per ton for no known reason.
5.4 Wholesale Price of Coal Briquette
By offering 20% less price than charcoal’s wholesale price which is ETB5,000.00 per ton, the
price of coal briquette can be comfortably fixed at ETB4,000.00/ton, with profit margin of
ETB1310.00/ton for the investor (before tax and other governmental expenditures).
Therefore, by producing and marketing 100,000 tons of coal briquettes, it is possible to achieve a
total income of ETB400 million per year and profit of ETB131 million/year, without
considering the investment costs of the project and before paying taxes and all government
expenditures.
72
Table. 9 Retail and Wholesale Prices of Charcoal and Coal Briquette
Fuels Prices (ETB /ton) Price difference

(ETB/ton)
Charcoal (retail) 7000.00
Coal Briquette (retail) 5,000.00 2,000.00
Charcoal (wholesale) 5,000.00
Coal (wholesale) 4,000.00 1,000.00
5.5 Government Expenditures and Taxes
Primarily, it becomes essential to know the total amount of government revenues, taxes and other
related expenses in order to calculate the amount to be payed to the government before calculating
the payback period of the company. Royalty fee for mines is 4%, which means ETB 28.17/ton.
Regarding other government taxes and expenditures the following information (Table 3) has been
acquired from the internet.
73
Table. 10 Business Profit Taxes/
Taxable business Tax rate (in Deduction Tax payable
Income (TBI)/ Net %) (TR) in Birr (D)
(TP)=(TBI x TR –
profit per year D)
Over To Birr
Birr
0 1,800 Exempt TBI x 0.00 – 0

Threshold
1,801 7,800 10 180.00 TBI x 0.10 – 180
7,801 16,800 15 570.00 TBI x 0.15 – 570
16,801 28,200 20 1,410.00 TBI x 0.20 – 1,410
28,201 42,600 25 2,520.00 TBI x 0.25 – 2,520
42,601 60,000 30 4,950.00 TBI x 0.30 – 4,950
Over 60,000 35 7,950.00 TBI x 0.35 – 7,950
In case of coal the revenue is due to the royalty fee of mining 4% (ETB28.17/ton) and the
corporation tax charged at 35% of profit.
Secondly, it becomes necessary to figure out the total investment costs of the project. The
following costs are estimated as investment costs of the project at the current international and
national price rates.
5.6 Investment Costs of the Project
Wirinka Coal Project can be taken as two entities under the same management office and
personnel. Wirinka Coal Mining and Marketing will take over the mining and raw coal selling
(marketing) aspect. For convenience of management the
74
mining project will simply extract the coal and supply or sell to the briquetting plant as well as
other demanders when found necessary. Thus, the following machinery will be procured and used
by the mining project (Table 4).
Wirinka Coal Briquetting and Marketing is a separate Project from Wirinka Coal Mining and
Marketing Enterprise. It buys coal from the mining enterprise at ETB 1200/ton and produces coal
briquettes. The Processing plant is divided into two parts and places; which are coal carbonization
plant right at Wirinka and coal processing and briquette manufacturing plant around Addis Ababa.
Both plants are incorporated under the processing and briquette manufacturing project. Therefore,
the following machines, utilities and logistics are essential to produce 120,000 tons of coal
briquette annually.
5.6.1 Briquetting Machines and Equipment
Table. 11: Machines and Equipment for the coal briquette factory
Machines Capacity of Qty Total price USD Total price
each (ETB’000)
Carbonizer 30,000 4 1,00million 17,600.00

tons/year (estim.)
Coal crusher 30t/h 1 9,100 160.160
Coal mill 15t/h 2 23,100 406.560

(pulveriser)
Mixer 8t/hr 4 11,120 195.712
Honey comb 1,200 pcs/h 5 23,600 415.360

briquette forming
(1.2t/h)
75
5.7 Locations of Factories and Land Rent
5.7.1 Location of Coal Carbonization Plant
Coal carbonization is a smoky process that has to be performed in an isolated area. Wirinka coal
must be carbonized right at/or around the mine area where supply of stream water is sustainably
available. The carbonization and the smoke cleansing plant must be separated from the active
mining operation site in order not to suffocate coal miners and other settlers in the area.
Sustainable water supply is essential mainly for scrubbing and cooling (cleaning) the smoke. Three
ponds will be constructed in order to hold water for the scrubbing and cooling process.
76
Stream water will only be used as make up water, while the polluted water will be regenerated,
cleansed and recycled several times before it is lost into the ambient. There will be no outflow of
contaminated water. Residues and fine particles from the smoke scrubbing and cooling systems
will be occasionally removed and filled into the open mine site where coal is excavated.
The carbonization plant with all other constructions can be established on two hectares of land.
There will be no rent of land at the mine site because of the right to use the area both for mining,
storing and processing. Details of coal carbonization and smoke treatment processes will be
discussed in the feasibility studies.
Table. 13: Summary of coal Production & Distribution Costs (annual)

Operation (Processing) Unit Costs (ETB) Total cost(ETB‘000)
Cost of raw coal 1200/ton 169,028.6
Coal Carbonization cost 260.00/ton 26,000
Transportation cost 700.00/ton 700000
Briquette Production cost 340.00/ton 34,000
Distribution cost 60.00/ton 6,000
Total costs 305,728.6
Contingency (15%) 45859.29
Grand total 351,587.9

This means ETB 351587.9 million per year.
Project Inputs
5.7.1 Manpower Requirement for Briquette Production and Distribution
A total of 24 professional and none professional workers are needed to fully operate the briquette
production process as permanent employees. Moreover about 25-35 daily labourers are also
needed to provide manual assistance during the full fledged production process. The total
breakdown of the human resource demand is as follows.
77
Table. 14 : Human Resource demand

Human Resource needed Qualification
Project General manager 1 Mechanical engineer
Technical manager 2 Processing engineer
Project Administrator 1 Administration expert
Machine and loader operators 4 technicians
Drivers and forklift operators 3 drivers
Finance officers 3 Accountants
Secretary 2 Secretarial science
Others 8 Clerks, office boys, Janitors,

etc
Contract and temporary employees 25-35 Manual workers
Salaries and allowances of employees and other expenses are included in the processing costs.
78
.Annual income from sale of briquette coal in:
Table 17. Annual income from coal briquette sales (ETB)

Unit price Total price
Coal Briquette 4,000 / ton 400 x 106
Taxable Business Income (TBI): TBI
= (400 x 106) – (286.6 x 106)
TBI = 113.4 x 106
Tax payable = Income tax x TBI – Tax Deduction
Income tax = 35%
Tax payable = 35% x (113.4 x 106) – 7,950
Tax payable = 39.68 x 106 ETB
Therefore, the net income after tax (the annual cash inflow) = TBI – Tax payable Annual cash
inflow = (113.4 x 106) – (39.68 x 106)
Annual cash inflow = 73.72 x 106 ETB / year
Payback Period = Initial Outlay / Annual cash inflow
= (59.17 x 106) / (73.72 x 106)
= 0.8 years or 9.6 months
Therefore, the payback period for the coal briquette processing and marketing project will
be 0.8 year or 9.6 months.
79
5.8 Market Strategy Assessment
Coal briquette marketing will initially be conducted in the capital city and the assumed centre of
marketing the product. Addis Ababa and the surrounding towns with population of about 4 – 5
million are the largest market centres and intensive cooking fuel demanding areas in the country.
Thus, it becomes essential to consider Addis Ababa as the major market centre for domestic coal
fuel supply site in the country. The marketing process will be studied with the advantages and
benefits it brings to the investor. The enterprise shall foresee either one of the following options.
5.8.1Self Marketing (Retail sales)
Although, the retail price of coal briquette is significantly higher and more profitable for the
enterprise, it requires organizing numerous facilities such as product stocking and sells areas,
which includes secured and dry stores, transport facilities, offices, and a large number of
employee, etc. at every site. With the present shortage of everything in Addis Ababa (land, houses
for rent, and other facilities including the mobility problem for the trucks it seems that self
marketing business will be some what problematic and impractical.
5.8.2 Outsourcing Product Sales(Bulk Sales)
Bulk sells means selling or distributing to people who have the facilities to transport and store the
product in the same way they have been selling charcoal and other fuels. Charcoal bulk buyers and
retail sellers have been approached and interrogated about their willingness to receive and
distribute coal briquettes instead of or/with charcoal. Most charcoal wholesalers have shown great
interest in receiving and distributing the proposed product.
80
Therefore, it is advisable to outsource the market. Distribution of the coal briquettes to the
wholesalers’ places could be carried out using few rental trucks
5.8.3. Technology of Coal Briquette Production Process
When loading on to trucks the coal must be properly sorted in order not to include dirty coal and
run off mine (rom) and other substances from the surrounding areas. Sample testing shall be
carried out often in the laboratory. This includes proximate analysis:
 Simple specific gravity test by weighing certain volume of coal.

 Moisture content and volatile matter content testing using electric oven with adjustable
temperature
 Ash content and fixed carbon content test using the same oven with adjustable
temperature
 Coal samples shall occasionally be sent to well equipped laboratories for sulphur content
and calorific value measurements
Once the quality of the coal is identified and determined the following technical process shall be
performed to produce coal briquettes
 Reduce the larger sizes manually by daily labourers using heavy hammers
 Crush the coal to be fed into the carbonizer
 Carbonize the coal to the recommended time- temperature parameter, so that it becomes
free from smoke and unwanted smell that comes out of the tar and volatile matter content
 Crush and pulverize the carbonized coal
 Mix the coal powder thoroughly with the de-sulphurising agent, the binding material, other
additives (clay when necessary) and water until it is wet enough to bind strongly in the
briquette forming machine. Don’t forget considering the mix ratio of all materials that
depends on the quality of the coal.
81
 Press and produce honey-comb briquettes of different sizes as requested by consumers by
changing the mould of the press
 Convey the briquettes to the open air drying area (shelter) and carefully place on wire
mesh racks for proper air circulation and drying. Don’t forget to build a shelter with over
head (roof) and sufficient ventilation in order to protect the briquettes from rain and
enhance the drying process respectively.
 Otherwise dry the briquettes in a kiln (Using kiln for drying is a better option, but incurs
additional investment and operation costs.
 Collect the briquettes carefully and pack for market distribution.
Raw coal Raw coal Manual coal size

from mine stockyard reduction Coal carbonization
H2O Additives Binding materials
Mixing (fine Sieve (size Coalite milling Coalite crushing

coal) separation) (pulverising)
Briquette To distribution
drying & sale sites
De-sulphurising agent
Briquette forming
(Pressing)
5.8.4 De-
82
6 Machinery and Equipment requirements
Table. 18 List of Equipment

S.No Items Quantity
1 Excavator 30 ton 02
2 Loader 6 cum buket 02
3 truck (15 ton capacity) 10
4 Grader 01
5 Dozer (D&R capacity) or (D355 komtsu) 01
6 Drilling m/c (110mm) 01
7 Jack hummer 04
8 compressor (350 CFT) 01
83
Camp structure & set up
Maintenance work shop & spare parts Ware house Carvan

= 01 Spare parts
Diesel tanker = 01 (stationary)
= 01 (movable on vehicle)
Personal carrier (Mini bus) = 02

Pick up = 02
Work shop equipment – Air compressor
- Welding machine = 01
- Greasing machine = 01
- Cutting machine = 01
- High pressure washing machine = 01
Mine working schedule:- 1 .

day shift working only
2 shift hours = 8 hours/day
3. No of working day in a year = 300 days
84
D CHEMICALS
Production target PLC (CHIDA COAL MINING FEASIBILITY)
Stripping = 1:3
Coal production = 300000 ton per year
Waste stripping = 12000 ton
107
Capital expenses (A)
Table. 20.Capital expenses for machinery

S.No. Equipment Cost (US $)
1 Excavator 500,000
2 Loader 6cum 210,000
3 Trucks 455,000
4 Grader 175000
5 Dozer 210000
6 Drilling M/C 80000
7 Jack hummer 5000
8 Compressors 8000
Total 1,653,000
Table. 21.Capital expenses (Camp set up cost)
S.no Item quantity Unit cost (US Total cost

$)
1 Caravan 05 4,000 20,000
2 Personnel carrier 02 75,000 150,000
3 Pick up 02 25,000 50,000
Work shop equipments
1 Compressor 01 1000 1000
2 Welding M/C 01 500 500
3 Greasing M/C 01 500 500
4 Cutting M/C 01 500 500
Total 222500
Total capital expenses (A + B) in US $= 1,653,000 + 222,500 = US $ 1,875,500
108
Table. 22 Manpower List

S.No Position No of person
1 General manager 01
2 Mine manger 01
3 Account officer 01
4 Accountant 01
5 Human resource officer 01
6 HR support staff 02
7 Shift in charge 02
8 Geologist 02
9 Assistant in charge (Shift 04

boss)
10 Operator 15
11 Helper 10
12 Store in charge 01
13 Maintenance head 01
14 Mechanics 02
15 Fitter 02
16 Auto electrician 01
17 Driver 11
109
Table. 23 Operating cost (Fixed and variable cost)
S.No Cost center Budget (US $)
1 Salary 35,000
2 Office equipment and stationary 2000
3 Electricity and housing 2000
4 Fuel 720,000
5 Lubricant 70,000
6 Maintenance cost 247,500
7 Explosive & accessory 15,000
8 Miscellaneous + head office expenses + 120,000

travel
Total 1,211,500
110
7. Organizational Structures
7.1. Manpower
The work force requirement of this project is determined based on the type and
quantity of equipments and machineries to be deployed for the quarrying,
loading, hauling, transportation and for other service rendering activities. Accordingly, the major
anticipated categories of these work forces are grouped into the production workers and supporting
staffs respectively(see Fig.34). Furthermore, the production unit will consist of skilled and
unskilled laborers who will be responsible for the production and managerial activities of the
project. Taking all these into consideration, the manpower requirement of the project is estimated
at 68 and their annual wages are about birr 7,692,000.
111
8. Financial Analyses
8.1 Manpower and Salary Requirement of the Project
The project will be managed by General Manager. The General Manager will lead a staff consisting of
three divisions finance, human resource and operation under each division a verity staffs is there.
The company will planned to have 60-70 man power in its project and head office. As shown in the
Table below:-
Table. 24 Man power and Salary Requirement of the Project.
Description Qty Annual

Salary/Wage
Salary/Month
General Manager 1 60,000.00 720,000.00
 secretary 1 25,000.00 300,000.00
 Internal auditor 1 15,000.00 180,000.00
Human Resource head 1 25,000.00 300,000.00
 Office assistance 1 6,000.00 72,000.00
 Drivers 15 60,000.00 720,000.00
 Drivers mate 5 10,000.00 120,000.00
 Store /time keeper 2 4,000.00 96,000.00
 security 16 32,000.00 384,000.00
Operation/mining/department head 1 50,000.00 600,000.00
Geologist 1 35,000.00 420,000.00
Mining Engineer 1 30,000.00 396,000.00
Chief Mechanic 1 20,000.00 240,000.00
Assistance 2 5,000.00 60,000.00
Chief electrician 1 20,000.00 240,000.00
112
Assistance 1 5,000.00 60,000.00
Operators 10 150,000.00 1,500,000.00
operators Mate 7 35,000.00 420,000.00
Finance & administration head 1 20,000.00 240,000.00
 Senior account 1 15,000.00 180,000.00
 Junior accountant 1 8,000.00 96,000.00
 cashier 1 6,000.00 72,000.00
Forman 1 5,000.00 60,000.00
Daily Laborers charge 5 18,000.00 216,000.00
Total 78 659,000 7,692,000.00
Machinery and equipment required
8.2 tools and work shop equipment’s

The following hand tools would be required for the operations
Table 26 Tool and Projected cost

No Descriptions Qty Unit Price Total Price
1 Complete garage tools set 200,000.00 200,000.00
2 Welding machine 2 50,000.00 100,000.00
Greasing machine 2 50,000.00 100,000.00
Cutting machine 2 50,000.00 100,000.00
Weight machine 1 10,000.00 10,000.00
Sledge hammer 10kg 5 1,500.00 7,500.00
Sledge hammer 5kg 10 1,000.00 10,000.00
Pressure machine 2 30,000.00 60,000.00
Battery charger 2 30,000.00 60,000.00
Total 647,500
8.3 Pre – Operational Cost

As shown Table 29, Pre-Operational cost includes - all expenses for pre-investment studies, consultancy fee
during construction and expenses for company‘s establishment, project administration expenses, commission
expenses, preproduction marketing and civil industrial explosives etc.
Table. 29 Operational cost

Description Unit Total cost
113
Project document preparation Lump sum 30,000.00
ESIA document preparation Lump sum 130,000.00
Site survey and land use planning Lump sum 150,000.00
Miscellaneous Lump sum 100,000.00
Total 410,000.00
Summary of fixed capital investment

o
sn Plant and machinery Pre operation Building & Tools & Office furniture
coast civil cost workshop
equipment
65,392,750 410000 350000 647500 170000
Total 66,790,250
114
10.1 Conclusion
In general terms, coal mining and marketing is a profiting business all over the world.
Otherwise, economic giant nations such as the United States, China, Germany, Australia and
others wouldn’t be involved in mining, marketing and utilizing coal. Coal is one of the most
primary sources of energy in the world and the most credited in developing this world. The
industrial revolutions of the past centuries would have been a blank history without the
involvement of coal energy.
Due to various reasons, Ethiopia has so far not benefited the advantages from its indigenous
natural resources, of which coal is the one. Though it is too late, the period of indigenous coal
utilization in this country might have come. Wirinka Coal resource being one of the significant
resources in the country will hold its position amongst the other similar quality coal resources
in the country. Above all, it is a resource that could be mined by open pit extraction method.
115
The energetic quality of the coal is also high when compared to other similar resources in the
vicinity.
Wirinka Coal is surface minable, qualitatively applicable for industrial, power generating and
domestic applications. It is not very far from major consumption areas, and is accessible by all
weather roads already existing. It requires no if not little compensation fees for settlers, as there
are few nomadic and temporary settlers moving around with their cattle.
The quality of the coal offers opportunities for utilization as power generating, industrial and
domestic fuel. Therefore, all options lay in the hands of the investor to enjoy the various
benefits and profits of the resource.
The demand for coal has risen up just at the time when the cost of other energy sources such as
industrial fuel oils and other petroleum products has become unaffordable (untouchable) and
the demand for indigenous energy resources has become ultimately essential.
Investigations reveal that the coal can be technically processed and industrially manufactured
as domestic, institutional, commercial, and industrial fuel to be marketed and used in different
economic sectors of the country.
The knowhow of the processing technology is also locally available with all or most of the
input materials and are ready to bring significant profits for the investor. Raw wirinka Coal can
also be sold to many and various industrial establishments without much to worry about
transporting and processing in and around the major market centers.
The financial benefits of raw coal marketing and processed coal briquette marketing are clearly
illustrated and visualized to the investor. It will only be a matter of decision making by the
investing company to select the easiest road and enjoy the respective benefits.
116
10.2 Recommendation
The company should start coal mining activities within one year and be the first to introduce
new coal mining technology in Ethiopia.
117
118

Ethioworld Trading PLC: Coal Mining Feasibility

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Ethioworld Trading PLC: Coal Mining Feasibility

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EthioWorld Trading PLC.

MIZHIGA COAL MINING FEASIBILITY

BENISHANGUL GUMUZ NATIONAL REGIONAL STATE

KAMASHI ZONE, MIZHIGA WOREDA, WIRINKA KEBELEE AT A

Contents Table of contents

Investment capitals to coal and supply to users in the country.

1.2 Location and Accessibility

Fig. 1 Geological map of location

1.5 Population settlement and Land use

Proximity to Towns and transportation systems

Availability of Labor, Utilities and Land for Plant Facilities

1.6 Historical, Cultural, Religious and

1.7 Purpose and scope

 A compilation of the environmental aspects of Wirinka coal was made.

1.9 Data sources

Data was gathered in the following areas of interest,

This data was obtained from the following activities,

 Previous exploration reports and literature searches.

 It helped us to select the proposed area for further exploration study

Year Company Drill Exploration Activity

2019 Ethio World Trading PLC Detail geological mapping, field

2020 Ethio World Trading PLC Detail geological mapping, field

2020 Ethio World Trading PLC 2 Detail geological mapping, field

2020 Ethio World Trading PLC Detail geological mapping, field

Pit location and description

3.2 Chip sampling

3.2.1 Laboratory result

Table 2 Chip samples laboratory analysis

S/N Sample no Sample location in UTM Altitude Calorific Average

1 Ch-C-1-1 0258908 0801191 1063 3653.12

2 Ch-C-1-3B 0259262 0800950 1073 2855.09

3 Ch-C-1-18 0259410 0800626 1086 3641.84

4 Ch-C-1-17 0259439 0800404 1090 2415.37

6 Ch-C-1-13 0258602 0799527 1134 1795.98

7 Ch-C-1-15 0258519 0799357 1138 3546.26

8 Ch-C-1-6A 0258201 0799307 1142 2187.75

9 Ch-C-1-6B 0258201 0799307 1142 4023.54

10 Ch-C-1-20 0259788 0800257 1145 2351.01

11 Ch-C-1-14 0259780 0799625 1148 4167.71

12 Ch-C-1-5 0257963 0798747 1160 1150-1200 <24 <24

3.2.1 Coal Rank Determination of USGS

Sub bituminous A =10500-11500; B=9500-10500; c=8300-9500

Lignite A =6300-8300; B=6300

a. Calorific value < 1000 cal/gm

b. Calorific value 1001 cal/gm -2500 cal/gm

c. Calorific value 2501 cal/gm -3500 cal/gm

d. Calorific value3500 cal/gm -4500 cal/gm

Moisture content %, Volatile matter %, fixed carbon %, Ash %, Sulfur %

Australia < or=33 < or=0.33 F.c>or=69 - Anthracite

F.c <or=69 10,500-11,500 sub Bituminous A

9,500-10,500 sub Bituminous B

China standard <or=44 <or=0.33 >or=69

69-86 8,300-9,500 Bituminous

<6,300 sub Bituminous A

Wirinka, mizhiga 46.83% 0.18% <69% 7615.8(maximum) sub Bituminous C

Table 4 Geographic co-ordinate

1 09° 10' 33.96" N 036° 06' 40.58" E

3.3 Borehole result & discussion.

3.4 Measured reserve estimation

Table 5. Coal potential target blocks with their respective reserve.

size is computed and it is equal to 3,923,954,126 kg

4.1 METHODOLOGY USED FOR MINE DESIGNING AND PLANNING.

Y-1 Y-2 Y-3 Y-4 Y-5 Y-6 Y-7 Y-8