A Chinese company awarded a multi billion shilling concession to mine coal in Kitui appears not to exist. A delegation comprising MPs, the Kitui provincial administration and Ministry of Energy officials has just toured China and found that Fenxi Mining Group does not appear to operate any mines.
Last December the Ministry of Energy selected from seven bidders to mine Block C and Block D of the Mui coal basin. Officials said that Fenxi was "most financially and technically compliant." The renewable concession of 21 years will allow the government to have an 11 per cent share and 23 per cent of gross revenue. The Mui basin contains a minimum 400 million tonnes of coal, worth around US$40 billion (Sh3.4 trillion) at today's prices.
The delegation led by Mutito MP Kiema Kilonzo was taken to visit a mine in Xuzhou operated by respected company XMC. But the team's report said, "it was evident there was no relationship between Fenxi Mining Company and XMC. On this day, Fenxi were visitors like we were". Instead of meeting Fenxi, the delegation was taken to the headquarters of the Jingu Group which has multiple companies inb real estate, housing, hotels and old age residential care.
The delegation discovered that Fenxi has conflicting addresses in Beijing. "Why Fenxi never allowed the entourage to visit their headquarters which is said to be at CYTS Plaza No 5 DongZhimen South Street-Beijing China. Tel 100007. It was interesting to note that the telephone and fax numbers are the same 010-38156278. This is as per communication with Ministry of Energy officials and the entourage. This contradicts the address on the web at the time of the visit," stated the report submitted to Energy minister Kiraitu Murungi.
The report has also been copied to President Kibaki and Prime Minister Raila Odinga. The Jingu group hosts refused to take the delegation to the addresses listed for Fenxi. The team visited Beijing China between May 12 and 20. The team comprised Muthusi Kitonga( former MP), Martin Kiema( geologist), Jennifer David ( businesswoman), James Kamau ( DC Mutito), Lilian Nyamai (chief, Ndoa), Eunice Kilonzo ( Kitui Central), Mutiso Raymond Muite ( mines and geology department), Mukami Kaburu ( Ministry of Energy) among others.
The delegation asked why Jingu has taken over when it does not have contractual obligations with the Kenya government. "The headquarters of the Fenxi group, the company entering into a contract with the Kenya government for 42 years, is indicated to be in Beijing. However, the staff took us to the headquarters of Jingu group. The formal relationship between Fenxi and Jingu could not be established. Similarly, as to whether Fenxi was a legal entity (company) in China," said the report in part.
The report further sought clarification on the relationship between Fenxi and Jingu and why there was ambiguity in the role of the two companies in the mining contract. The report seeks to have the mining concession given to Fenxi put on hold until the unclear issues are thrashed out. The report further said that the delegation was also dissatisfied by information that Kitui coal would be transported to Kilifi where a power generation plant will be set up.
The reports suggest that the contrary should happen as Kitui county needs electricity for the processing of iron ore, limestone and other minerals. Last Friday Water minister Charity Ngilu and MP Kiema Kilonzo vowed to shoot down the project unless all the dubious issues on the coal mining project are thrashed out and the interests are appropriately taken care of.