Multi-billion shilling coal mine plan sparks anxiety over payment

Jacob Musyoka, 48, is one of the six petitioners who have filed a case against the government and Chinese firm, Fenxi Mining Industry Company, which has won the multi-billion shilling tender to mine coal in Kitui.

(Read: Coal mining dispute shifts focus to Chinese company)
The Nairobi businessman with roots in the Mui Basin, Kitui County, says conflicting reports over the ownership and capacity of Fenxi to undertake the project has sent mixed signals to the local community, raising fears that the residents will get a raw deal from the project and benefit a few profiteers in the government and influential businessmen.

“When our leaders went to China (on fact finding missions) they came up with conflicting reports. It was then that we noticed something was wrong,” said Mr Musyoka, whose family owns an estimated 200 acres of land in the Mui Basin.

The High Court has blocked the signing of the mining contract between the government and Fenxi, and given the government up to October 23 to file its response to the case.

But the case has divided opinion among residents and the leadership of Mui, with the chairman of the Mui Basin Coal Projects Block C and D Liaison committee, Eric Mutua, saying it is premature for the petitioners to have gone to court.

Mr Mutua, who is also the chairman of the Law Society of Kenya, says recent gazettement of the 10-member Mui Basin liaison committee gives the community a legal avenue to negotiate for compensation terms with Fenxi and the government.

Though Fenxi has won the tender to develop block C and D of the Mui coal bed, signing of the 21-year contract mining is only expected to come after negotiations for benefit sharing between the Chinese firm, the government and the local community is concluded.

A breakdown in the negotiations would, in Mr Mutua’s opinion, justify going to court.

“I’m not ruling out going to court, but this is not the time,” said Mr Mutua in an interview. “We will go to court if we disagree at the time of negotiating benefit sharing,” he added.

Blocks C and D of the Mui Basin are estimated to hold about 400 million metric tonnes of coal valued at Sh3.4 trillion going by the current market rates.

Blocks A and B, which are still in the tendering stage, are yet to be fully explored to determine their total potential.

The four blocks are estimated to have 30,000 households who will have to be relocated to pave the way for the project.

The residents are afraid that botched up resettlement process could impoverish generations of Mui basin residents, but there is a general consensus that the project could transform the local and national economy by providing cheaper electric power.

Peter Kithung’a, 50, says the current Mining Act is silent on issues of compensation of the locals where minerals are discovered.

The Act says that 80 per cent of the revenue generated should go to the central government, 15 per cent to the local government and five per cent should be used to develop projects that benefit locals.

“If we go into the project with the current Mining Act we won’t benefit. Let this thing await the full implementation of the Constitution, conclusion of the General Election and setting up of county governments, which will negotiate better on our behalf,” says Mr Kithung’a.

The University of Nairobi lecturer says a preferable benefit sharing agreement would be one that would gives locals shareholding in the mining firm that would guarantee them a steady source of income in the future.
Within the basin itself, opinion is divided on how the mining should be carried out but what is apparent is the fact that lack of information is hindering useful engagement with the community.

Thirty-year-old Joseph Mutua who operates a small bank agency business in Lulindi village said it has been difficult to take a stand or make informed decisions without knowing the full details of what is happening.

“It is frustrating to say the least because some of the information on coal we are hearing from you. If we knew firsthand what is expected of us it will be easy to engage meaningfully with the authorities but now it is my case against that of the rest,” said Mutua, 30, who is married with three young children.

According to him, it is premature to talk about uprooting him from his home with or without his consent. “I can’t even tell you how much compensation will convince me to move out. Here we have farmers, livestock keepers and those in employment. Each family owns different sizes of land that they have put to different uses and whether it would be possible to merge our common interests is the question,” said Mr Mutua.

Others like Munyithya Kituo, a teacher at Ndiamumo Pimary School, says the decision to relocate or not should be optional. “I would personally wish to remain but if it is a must we are moved let everyone decide how they prefer to be resettled.”

Already there are reports that the government would forcibly take over the land and only compensate those who agree to relocate. But the villagers say they will resist such a move.

“Without proper agreement we will not budge an inch. The compensation talked about must take into consideration the years that we have lived here and the fact that the value of our land is now not the normal one. They must pay us for the resource beneath,” said 56 year old Isaac Makau.

With 60 acres of land, Mr Musyoka, for example, says he is looking to pocket up to Sh180 million in compensation. He says he would not let go an acre without compensation ranging from Sh2 million to Sh3 million. The average price for a similar size of land was about Sh200,000 an acre before the announcement of the coal discovery.

Yet for Rose Syombua, 53, the size of her land is not the worry. “My concern is I do not have the title for the land I inherited from my late husband. The money being asked to get the vital title deed is too much for me,” said the mother of five. Villagers say survey and mapping for Mui had not been properly done, with about three out of every four people said to lack title deeds.

Ms Phyllis Munaw’e, also a teacher, appealed that decisions on the relocation include all villagers, claiming rumours were circulating that not all of them will be relocated. She said health and environmental hazards associated with mining activities would endanger their lives.

“If coal is going to be mined here let no one be cheated they could remain. We have heard of mudslides and other disasters where coal is mined in China. If we do not move we will be swallowed literally due to the topography of our land,” she said.

Sustain lifestyle

Michael Musyii is worried about what will happen to their schools, hospitals and churches which they have toiled to establish over the years. “How do we get back all these investments?” he poses, drawing support from Jackson Musyimi, who at 73 years, ekes out a living from selling meat at Mui market. With 18 children, he is not sure how he would sustain his lifestyle if asked to move.

“We have stopped carrying out usual development on our land as we are receiving conflicting reports on when mining will start,’ he said.

Mr Musyimi is also concerned that relocation to an urban area, as it is rumoured, would end the community’s livestock rearing, farming and bee keeping lifestyle.

Those with small businesses are also concerned about how they will be compensated.

“Let us first know who we will negotiate with so that we avoid being cheated like in the past,” Musyimi said, adding that a promise by the government to sink water boreholes during the exploration stages had not been met.

Ms Lillian Munyasya, a 22-year-old university student from the area is, however, optimistic that the coal project could change the area youths’ economic fortunes. She says stories she has heard about Mui being transformed into an industrial city with many manufacturing firms setting up factories near the basin to cash in on the cheaper energy would be a boon for jobless youth.

The MP for Mutito, Kiema Kilonzo, said the deep fear among the people would only end if the government was more transparent in the whole process.

“The question of equity participation for example is vital to secure the confidence of the people, and for this we need direct engagement with the State or competent multinational mining companies and not middlemen,” the MP said.

Mr Kilonzo prefers a clear legal framework to help the community maximise on its benefits.