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Kitui County residents mobilize for proposed coal mining project

Source: Coastweek

by Joy Nabukewa KITUI (Xinhua) — A massive drive to mobilize residents of Kitui County in eastern Kenya into a saving and co- operative society is underway as the community seeks to increase their stake in the lucrative coal mining project.

If successful, the ambitious plan to mobilize 11.25 million U.S. dollars from local community will circumvent the tough financial and technical conditions set by the government to concession the remaining coal reserves.

Those championing the drive propose to float 100,000 shares costing 112 dollars each after obtaining the necessary regulatory approvals and have already registered the entity to be used.

With the backing of local leaders, professionals, church and business leaders have borrowed experiences in countries like South Africa, Malawi, India, China and even closer home, Tanzania, where mining co-operatives have thrived over the years as a means of ensuring communities fully benefit.

Nairobi lawyer and former chairman of Committee of Experts which drafted the Constitution Nzamba Kitonga has been picked to lead the efforts as the interim chairman of Mutito-Zombe Cooperative Society.

Mutito Member of Parliament Mutua Muluvi has argued that with the county’s population of 1.2 million people, the initiative only requires proper mobilization targeting at least 40 percent to buy the idea and join the mining cooperative.

Muluvi said the local community should be allowed a one year grace period to mobilize the funds required and be part of the winning joint concessionaire.

“We are ready to mobilise residents including businessmen across the county and all we are asking as leaders is for the government to grant us a one year window to achieve this target,” Muluvi told Xinhua on Saturday.

According to interim officials who spoke to Xinhua, members will be allowed to own more than one share in order to achieve the 11.25 million dollars capital base.

The plan is informed by the sad reality that most firms in Kitui County do not stand any chance in the tough global tendering process, for coal blocks A and B in Mui Basin which closes this week.

The lessons learnt during the bidding for Blocks C and D, where Mui Minerals Limited, the only Kitui firm tendered but was knocked out for failing to meet the stipulated criteria, are being applied to avoid controversies witnessed in the last three years.

In the conditions spelt out by the ministry of energy, foreign investors are required to form joint ventures with local companies in the mining project, but the definition of this condition is causing jitters in the county.

Although legally, local partnership in international tendering means firms from host country, the word local is nevertheless assuming a different interpretation to mean firms from the project area – Kitui County.

The matter is not helped by the wider definition provided in the East Africa Common Markets Protocol which gives firms in the region an equal footing.

According to Mike Kyalo Mulei, a Mombasa-based lawyer who was elected to chair the liaison committee for the two blocks, the word “local partnership” should be properly defined in all aspects to enhance capacity of the community.

He said the condition that prospective investors demonstrate a history of having undertaken coal mining projects of similar nature in at least three developing countries was a tall order for many Kenyan firms.

“We won’t submit any bids because eligibility criterion is so high and clearly we can’t meet the conditions and the amount of funds required,” he said.

Mulei said to the foreign investors, local means Kenya, while this presumably changes when it comes to the land owners who believe that the same means the county which hosts the project.

They want to defeat a situation where another “outsider” firm is picked as local partner like it happened during the tendering for Blocks C & D where Great Lakes Limited, a Kenyan without shareholding from Kitui.

The government is aware of this disquiet and is keen to engage the community to avoid a similar round of wrangling and court cases which may derail the project.

According to John Omenge, chief geologist at the Ministry of Energy, the government will continue embarking on constant awareness campaign that brings all stakeholders and the community on board.

Omenge said lauded efforts by community leaders to create a vehicle that encompasses the aspirations of all people for purposes of negotiating with various investors as opposed to individual land owners.

The plans to organize people into a cooperative have also been endorsed by the local MPs and the county leadership as the best option to ensure all people take part in the equity.

George Mulatya, the County minister for environment and mineral investments, said his department was facilitating a framework for engagement among various stakeholders while protecting public interest in the negotiations.

Member of Parliament for Kitui Central Makali Mulu challenged Kitui Governor Julius Malombe to set aside 1.2 million dollars as shareholding for the county government to boost local investor confidence of those interested.

The MP said statistics showed that 40 percent of our country’s population are between the productive age bracket of 27 to 50 years and hence able to raise 112 dollars required for a single share.