Chinese firm to invest $500m to mine coal in Kenya

• Chinese firm has formed a joint venture with locally owned Great Lakes Corporation to form Fenxi Mui Mining Corporation and estimates 2016 as the earliest date that mining of coal could start.

Chinese mining firm Fenxi plans to invest at least $500 million in exploitation and production of coal in Kenya, after obtaining approval from the government.

The Chinese firm has formed a joint venture with locally owned Great Lakes Corporation to form Fenxi Mui Mining Corporation and estimates 2016 as the earliest date that mining of coal could start.

The concession agreement for coal exploration area C and D in Mui Basin, eastern Kenya was signed on December 23, 2013 with the Ministry of Energy, Ministry of Mining, National Treasury and Kitui county government among others.

“Whatever was agreed on does not impair on the integrity and commercial bankability of the concession,” said Fenxi Mui Mining Corporation’s director George  Karithii.

In 2010, substantial exploration of Block C found commercially viable coal deposits estimated at 400 million metric tonnes. The government slapped Fenxi with concession fees of $3 million and $500,000 for Blocks C and D respectively in order to get the award.

The Ministry of Energy estimates that the two areas in Kitui county, about 180 kilometres away from Nairobi, have potential for 400 million metric tonnes of coal for power generation among other uses.

Fenxi Mui has contracted Nairobi-based Nortken International Ltd to carry out a strategic environmental assessment (SEA) for areas C and D for approval by the National Environment Management Authority (NEMA).

Dr Karithii said the SEA encompassing all components of the proposed project is expected to be prepared for approval by NEMA within six months prior to applying for an exploration licence from the Ministry of Mining.

“Further exploration work will be done to quantify the amount of coal. Mining activities will start after obtaining the requisite government approvals preceded by other studies to determine money to be invested,” he said.

Dr Karithii said the company, together with the government, is set to carry out a feasibility study of infrastructure facilities required to support mining operations, while land will be acquired from people residing in coal-rich areas.

“The study for water pipelines, roads, power lines and rail connectivity is vital to facilitate the actual construction of work,” he said.