kenyan update

Given what Fenxi paid for the C & D blocks - I don't expect CCC to have a chance of getting either of the remaining two blocks - but who knows?

Kenya pick Chinese firm Fenxi for coal mining

By: Reuters
12th December 2011

NAIROBI – Kenya has selected China's Fenxi Mining Group to develop coal mines in its Eastern Province, where production is expected in the next three years, the chief geologist at the ministry of energy said on Monday.

Government received interest from 16 firms last year when it started the search for a company to mine the coal, whittling them down to 11 firms, seven of which eventually submitted their bids.

"Two bids that were submitted by Fenxi for block C and block D were the most financially and technically compliant," John Omenge told Reuters by phone.

"The coal is for local use... for block C, we expect the mine to be running within two and a half years from the start of concession."

Fenxi will pay the government $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, Omenge said.

It will also allow the government to have an 11% participation in the project, sharing gross revenues at a rate of 23.6% for block C and 21.1% for block D, he added.

The east African nation is hoping that coal from the Mui basin, where block C is estimated to contain a minimum of 400-million tons, will help it to save foreign exchange through substitution of coal and oil imports.

Some of the coal will go to the cement and steel industries, which import coal worth 3.6-billion shillings a year, and the rest will be used for energy generation, helping to fill a gap that is usually filled by diesel-fired, thermal plants.

Officials plan to construct a 600 MW coal plant at the coast, which will initially use imported coal and then local coal when production from the Mui project kicks in.

Another power plant will be constructed in the area to use the coal, Omenge said, adding that a cement factory will also be put up in the area.

"With coal mining, the limestone there becomes economically viable," he said, adding that government will invite bids for development of the remaining coal blocks, A and B, before the end of this month.


http://www.miningweekly.com/article/kenya-pick-chinese-firm-fenxi-for-coal-mining-2011-12-12