Capital Markets

State plans to auction more coal blocks in Mui Basin

MUA

A Kitui resident points at the area covered by the Mui basin, which contains coal deposits. FILE PHOTO | NMG

brianngugi_img

Summary

  • The Energy ministry has been conducting coal exploration in the Mui Basin in eastern Kenya since 1999, covering an area of 500 square kilometres.
  • Kenya in 2011 selected China’s Fenxi Mining Group to develop coal mines in the area after attracting interest from 16 firms when it started the search for a company to mine the coal ten years ago.
  • The concession to mine coal in Blocks C and D of the Mui Coal Basin was awarded to the Fenxi Mining Group.

Kenya plans to auction additional coal blocks in the eastern region, an Energy and Petroleum Regulatory Authority (Epra) report shows, as part of a fresh push to exploit the rich deposits and help the country to save foreign exchange through substitution of coal and oil imports.

The Energy ministry has been conducting coal exploration in the Mui Basin in eastern Kenya since 1999, covering an area of 500 square kilometres.

“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 Epra said in a sector update.

Kenya in 2011 selected China’s Fenxi Mining Group to develop coal mines in the area after attracting interest from 16 firms when it started the search for a company to mine the coal ten years ago.

The concession to mine coal in Blocks C and D of the Mui Coal Basin was awarded to the Fenxi Mining Group. No progress of work has been reported, however, since then.

Coal mining concessions in Bocks A and B have also been put on hold.

To ease exploration logistics, the Energy ministry subdivided the Mui Basin into four coal blocks, A, B, C and D, measuring 121.5, 117.5, 131.5 and 120 kilometer squared, respectively.

A total of 71 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.

Initially Kenya had been hoping that coal from the Mui basin, where Block C is estimated to contain a minimum of 400 million metric tonnes.