Chinese Awarded Life-transforming Coal Mining Contract in Kitui County

Optimism is high that life will change for residents of Kitui County and  Kenyan generally now that a Chinese contractor has been awarded the coveted coal mining contract at the coal-rich Mui Basin in Kitui County. According to reports, the contractor is set to start work on the site soon. 

“A tender worth more than a billion US dollars has been won by a Chinese company and the mining of coal is set to commence soon,” the Kenya government said.

Mui Basin is estimated to have more than 400 million tones of coal deposits and the government said the mining will create wealth and jobs and improve infrastructure the area.

Industrial Zone

Suggestions are already being made to have the area designated an Industrial Zone for Kenyan manufacturers to benefit from cheaper power. Those with the suggestion cite the fact that the area has also been found to have iron ore and lime as compelling reason to make the area an industrial zone. Lime is a key component of cement

Cheap  Energy

The coal deposits in Kitui are billed as the best alternative source of cheap energy at a time when the country needs affordable power to drive Vision 2030, the economic blueprint that aims to make Kenya an industrialized country in 2030.

To date, Kenya relies up to 67 per cent on hydro sources, 10 per cent on geothermal and 23 per cent on thermal sources, which is price-sensitive to fluctuating international fuel prices and unreliable weather patterns. In South Africa, where coal mining is a major activity, about 90 per cent of the electricity is coal-fired and is four times cheaper than in Kenya.

Tenders

At least 16 international coal mining companies had expressed interest in coal mining in the Mui Basin. The  companies, which had responded to Kenya government’s call for investors in the project, came from the US, India, South Africa, China, UK and Australia.

They included Vale Inc. of Brazil, BHP Bilton of South Africa, Coal India, Continental Coal of Australia, TATA Power of India and China Nomation Machine & Export Corporation, London Coal Corporation of UK, Venmyn Rand of South Africa, Adhijeet Group of India, RSV Enco of South Africa, and Fenxy Mining Industry Limited of China.

Kenyan companies  that  submitted bids  included the Rift Valley Resources, Africa Power and Logic Lamu Infrastructure Company.

Tender Conditions

Investors were supposed to show an ability to raise funds in excess of $100 million, evidence of technical ability and a history of mining coal in at least three developing countries.

The 490.5 square kilometre basin The Mui basin has been sub-divided into Sombe, Kabati, Itiko, Mutito, Yoonye, Kateiko, Isekele and Karunga but activities are concentrated only in Kateiko and Yoonye.