Company secures exclusive limestone rights in Pokot

Sanghi Cement has secured exclusive rights over limestone deposits in West Pokot covering a 99-year lease period, in the latest indication that the Indian firm could finally be setting up a cement plant.

Pokot County Council announced last week that it had granted exclusive limestone mining rights to Cemtech, Sanghi Cement’s local subsidiary, over 106,000 acres (42,750 hectares) for nearly century.

Award of the mining rights come just weeks after Cemtech sought to recruit staff into senior positions including general manager, finance, to signal that the Indian firm was keen on setting up the plant- two years after the formal ground breaking.

Analyst reckon that the cement makers would ordinarily demand such rights for the exploitation of limestone, a bulky mineral that makes up to 60 per cent of finished cement by volume, before starting to actual plant construction.

“Most players would not set up a plant unless they have 50 years worth of limestone deposits at their disposal,” said Francis Mwangi, a research analyst at Standard Investment Bank, covering the construction sector.

Exclusive rights to exploit the resource mean that no other player would be allowed to the site over the entire period, making it necessary for public participation before the Competition Authority ratifies the deal reached between the local authority and the Indian firm.

Distance to Athi River, where all the five cement makers have their production plants, plus a poor road network from Pokot makes it necessary to ensure that the mining rights awarded to Cemtech are not contested by the already-established companies.

Narendra Raval, the managing director at National Cement said in an earlier interview that the distance to Pokot was prohibitive as a source of the bulky mineral, despite its relatively superior quality.

Rajesh Rawal, the Cemtech project director has indicated that the firm had signed a power supply agreement with Kenya Power to unlock the energy supply, which he claimed had delayed construction of the cement plant.

Prime Minister Raila Odinga presided over the ground-breaking ceremony for the project in 2010 but the construction is yet to kick off despite repeated claims by its promoters that it would open in 2013.

If it takes off, it is expected to add a production capacity of 1.2 million tonnes to the fast-growing Kenya cement sector, bringing the total industry capacity to about 6.7 million tonnes.

In November 2010, the Sanghi group appointed Diptish Nandha as the general manager of the project. He has been operating from Eldoret and Kitale.

Thomas Munyao has been the environmental consultant.

Delays in starting the Pokot project have been subject of speculation especially in the remote location where locals have been highly hopeful.