Ministry invites firms to explore more coal blocks

A worker at the Ngamia 1oil rig in Turkana County. Kenya has invited investors to bid for the exploration and development of two coal blocks in the country's eastern region. Photo/File

Investors have been invited to explore and develop a new set of coal blocks in the Mui basin as the search for cheaper energy sources gathers momentum.

“Coal blocks A and B are to be leased to prospective investors for possible exploration, exploitation, development and power generation from coal,” the Ministry of Energy said in a call for bids on Wednesday.

The two blocks are in Kitui County where both the government and the private sector have been active in exploration.

Coal has the potential to become one of Kenya’s most reliable and easily accessible base for electricity generation. Despite its potential, however, it provides just about one per cent of the primary energy consumed in the country, mainly by cement manufacturers.

As at 2011, all coal used in Kenya was imported. Data from the Energy Ministry show that between 2006 and 2011, consumption of coal averaged 130,000 tonnes per year.

China’s Fenxi Mining Group was recently awarded rights to develop coal blocks C and D within Mui basin and expects to start production by 2014. The government estimates that block C contains a minimum of 400 million tonnes of coal.

“To accelerate exploration, exploitation and development of coal blocks A and B, the Ministry of Energy has increased to 125 the number of exploratory wells in the two blocks, 10 wells of which have intercepted coal at depths of between 11 metres and 15 metres,” Mrs Milka Kaburu, the senior assistant director, Supply Chain Management Services, at the ministry said.

Kenya has sunk 73 appraisal wells within Mui basin and confirmed vast deposits of coal.

Apart from Mui, the government is exploring for coal at the Coast in Taru Basin in Kwale and Kilifi Counties and plans to extend the activities to other parts of the country.

“The purpose of this exploration is to establish coal potential and delineate more coal blocks for concessioning,” the ministry said.

These resources are expected to provide up to 2,400MW of electricity by 2030 as per the Least Cost Power Development Plan (LCPDP) 2011/2031.

KenGen, is working with a strategic investor to build a coal-fired power plant in Kilifi County. Phase 1 of the plant will have a capacity of 600MW. Construction is expected to start this year and commissioned in 2014.

PAYE Tax Calculator

Note: The results are not exact but very close to the actual.