Coal in Kenya: Since 2000, the Ministry of Energy has been exploring for coal in the Mui basin of Kitui and Mwingi districts. So far, 40 wells have been drilled and they have intercepted coal seams in 27 wells. The ministry has carried out a few tests on samples and established that the resource is of good quality.
The private sector has shown interest in coal exploration should commercially viable deposits be found. ln September, 2008, the ministry speeded up exploration in the Mui basin and contacted a private company, Foundation Piling Ltd, to assess the drilling of 20 wells in the basin and assess commercial viability of the coal deposits.
The Mui basin has been divided into four blocks to enable concession bythe private sector to invest in coal exploration and development. Work in other areas with good potential for coal – Taru formations in Kwale and Kilifi districts has also started.
Coal in Kenya
Kenya imports on average 150,000 tonnes of coal and coke annually at a cost of Kshs3 billion ($35.3 million). Coal is used in steel and cement factories.
KenGen also plans to put up a 600 MW coaleﬁred power plant in Kiliﬁ that will rely on imported coal.
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This may change, however, with the exploitation of coal reserves in Ukambani region.
The Ministry of Energy has been conducting exploration for coal in the Mui Basin since 1999, covering an area of 500 square kilometers and already two promising blocks have been concessioned to a Chinese company.
To ease exploration logistics, the ministry subdivided the Mui Basin into four coal blocks, A, B, C and D, measuring 121.5 , 117.5, 131.5 and 120 kilometre squared, respectively.
Seventy one exploration and appraisal wells have been drilled in the Mui Basin, mainly concentrated in Block C where 56 wells were drilled to depths ranging from 75 to 445 metres. Some 32 wells have intersected coal.
To fast track exploration, development and production, the Government has decided to concession all four blocks to private companies through a competitive international bidding process.
The Government received interest from 16 firms in 2010 when it started the search for a company to mine the coal, whittling this down to 11 firms, seven of which eventually submitted their bids. China’s Fenxi Mining Group won the rights to develop coal mines for block C and block D. Block C is estimated to contain at least 400 million tonnes of coal and is projected to be mining within two and a half years.
The Government has said it expects the coal to be for local use. Fenxi will pay the govermnent $3 million for block C and $500,000 for block D, in return for a renewable concession of 21 years, subject to approval by Parliament.
It will also allow the Government to have an 11 per cent participation in the project, sharing gross revenues at a rate of 23.6 per cent for block C and 21.1 per cent for block D.