Kimani P. Wainaina, Executive Director, Kencoal Ltd

KENYA Special

How did you come to establish Kencoal Ltd?

Seven years ago in December 2009, with no background in geology or exploration, I applied for an exploration license. Four years into the exploration we sank our first exploration well and intercepted coal at a depth of 80m. In 2014, we sank a second well up to a depth of 100m and intercepted a coal occurrence between the depths of 75m to 100m. Had we continued drilling past 100m we would have intercepted gold and copper.

In 2015, we sank a total of fourteen wells, and of these only three did not intercept coal. We can confirm that we have two occurrences of coal, the first between depths of 20m to 35m with a combined coal seam of 6m, and the second between depths of 70-105m with a combined coal seam of 12m. In 2016 we drilled an additional ten wells, which further confirmed the two occurrences of coal spread across an area of 8 sq. km. Two of the ten wells intercepted gold and copper lying beneath the coal, and we are in the process of raising capital to drill several more wells specifically to target gold and copper as we continue to quantify the coal.

What is the quality and quantity of the discovered deposits?

The coal we have intercepted is bituminous and subbituminous coal, with calorific value between 4500 and 7500 kcal/kg. Despite the negative opinions of coal, coal provides affordable power, and, we have begun the process of setting our minds towards building a 300MW coal power plant to add value to our project, broken down into a 50mw phase and a 250mw phase, using the most environmentally-friendly system. Fortunately for us we have encountered a lot of underground water.  Although mineralized, this water can also be purified and used for the local community.  From the initial drilling we estimate a coal deposit of 200 million metric tons.

Our initial test results indicate that the gold and copper discoveries are also of good quality, but we are yet to quantify the deposit. We have also intercepted zinc, nickel, tungsten and mercury, which are further good indicators that we are in a gold bearing area.

 

How have you been funding the operation so far?

In 2009, we spent approximately $3,000 to apply for the Exploration License, a process that took about 18 months under the old Mining Act.  Between 2009 and 2014, I self-funded the exploration activities, first with my savings, followed by selling my house and eventually my restaurant. I then sought some investment from friends – to date we have spent slightly over US$1,000,000.

Following the gold and copper interception, we are in the process of raising additional $1,000,000 to begin exploration and also complete our coal exploration. We hope to list Kencoal on the Kenya stock market by the end of 2017 – I believe we can raise $10 million from the local stock market.

 

In what ways has the new Mining Act been beneficial to business?

The new Mining Act has given us a lot of comfort; investors have a clear direction of what is expected from both the Ministry of Mining (the regulator) and for the mining/exploration Company.  The licensing process is now quick and transparent, removing fears that someone could come and take your license. Previously a lot of authority and power had been vested in an individual office.

The new Mining Act has given us a three-year prospecting license, renewable after three years for a maximum of 9 years – it provides peace of mind.  The Kenya Mining Industry is full of potential as investors can now invest and conduct exploration and mining activities without any fear. Finally, the new Mining Act allows investors to apply for a mining license while still carrying out exploration activities.

 

What are the plans for Kencoal Ltd going forward?

One of the plans for next year is to open up the ground and start mining. We also plan to have the first phase of the power plant running by 2020 and if we do have substantial gold and copper deposits, our plan is to add value and smelt the ore on site. There is a lot of limestone in the neighboring area, so major cement companies are planning on setting up operations nearby; they will use coal for both their processing and power needs.

 

Are there any particular barriers you anticipate that could hinder your progress?

Land in Kenya and anywhere in the world is always a very sensitive subject and has to be treated with a lot of caution. The New Mining Act is very clear on how land acquisition should be handled. However, we must involve the local communities in every step of the way. Part of our approach is to consider offering the immediate local community a stake in the project that goes above the prescribed royalties. Secondly, when it comes to land some of the options available include the option of leasing the land rather than buying the land. After all is said and done, we want to turn the land that we disrupt into an animal reserve, it’s hard to imagine when you walk around the very arid exploration area that just 50 years ago elephants, buffalos and rhinos roamed freely.

 

Do you have a final message?

In the Kenya mining industry a lot of exciting groundwork has been done, and is still going on, paving the way for all kinds of investments that will take the industry to the next level.  Within the next three to five years, Kenya will have affordable power from coal, which will allow Kenyan industries and mining companies to process raw minerals and materials into value-added finished products.  This is the time to invest in Kenya – not tomorrow, but today.

Karibu Kenya, Hakuna Matata!!!

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