Mui coal plant row goes out of court

• The community wants better compensation terms for their land, and direct revenue benefits for the Kitui County government.
• The Mui Coal Power Plant is expected to generate about 960MW of electricity, according to the Energy Ministry.

Kenya has offered political and community leaders in Kitui County an out-of-court settlement over the delayed concession for the mining of more than 500MT of coal in the area, in a bid to fast-track plans to add some 5000MW of power to the national grid in 40 months.

The leaders from Kitui, filed a petition in court August last year because they were not involved in discussions leading to the contract between the government and Chinese company Fenxi Mining Industry, which won the tender to build the first coal mining plant in the country.

“Out of the deliberations held, the ministry has reached an understanding with the leaders of the Mwingi Central Constituency Development Self Help Group, under which the latter will withdraw the matter from the court,” said Cabinet Secretary in the Ministry of Energy and Petroleum, Davis Chirchir.

The community wants better compensation terms for their land, and direct revenue benefits for the Kitui County government.

The proposed law on mining requires the government to cede 20 per cent of mineral royalties to the county government and 5 per cent to the community.

Cabinet’s approval

Documents seen by The EastAfrican show that lawyers representing Fenxi Mining Industry, and those of the government supported by the Attorney-General, have completed the technicalities involved in the concession. It is now awaiting Cabinet and parliamentary approval.

The Mui Coal Power Plant is expected to generate about 960MW of electricity, according to the Energy Ministry.

The ministry also plans another tender for the construction of an up to 1,000MW coal power plant in Lamu, on Kenya’s Coast.

The Mui Basin covers four blocks. Fenxi is waiting to sign concession for Blocks C and D, which have proven coal deposits of 400 million metric tonnes. No firms have so far qualified for concessions for Blocks A and B.

Fenxi Mining Industry will pay the government of Kenya a $3.5 million concession fee for the two blocks, plus a statutory special exploration license fee of $4 per square kilometre, an environmental impact license fee of $11,110 per bloc, and special mining fee of $21,000 per year per block. Other payments include $581,269 lump sum training fee.

The concession requires gross revenue sharing between Fenxi Mining Industry and the government of 23.6 per cent, and government equity participation of 11 per cent.