Turner & Townsend’s Kenya office explains the issues related to investing in Kenya’s young mining sector.

Turner & Townsend is a global company covering several key sectors. Could you give an overview of your African operations?

Mark Wainwright (MW): Turner & Townsend is a global capital programs professional services company that has been serving the industry for more than 70 years, representing the commercial interests of owners and operators, across the spectrum from junior to major companies, as well as funders. We have over 4,000 staff and an annual global turnover of more than half a billion USD. Our services cover the entire capital project life cycle, from the pre-feasibility stage onwards and includes advising on supply chain strategy, estimating an asset’s cost and schedule, managing contractual arrangements with the supply chain, execution and commissioning the asset.

Daimon Keith (DK): Africa is one of our eight global focus regions; we have been here for 34 years, first entering Africa on the back of our global mining clients. Now have almost 300 staff. We see East Africa, and particularly Kenya, as a key country to drive growth in the region and the continent . Mirroring our global business portfolio, the Africa business’s focus is split across property infrastructure and natural resource (mining, oil and gas) sectors.

What are the main challenges facing your clients in Kenya’s mining sector? Continue reading →

Kilimapesa has commissioned stage one of a new processing facility at its gold mine in Kenya.

Kilimapesa was the first gold mine to be commissioned after independence. What have been the key developments over the years?

Exploration began in 2007. The initial area of interest was originally licensed to a company called Sebimu and, as they were also looking for investors and partners, we reached an agreement in which we attained part of the license. We then acquired an exploration license and carried out a detailed drilling program, analyzed the results, and realized we had gold potential. The confirmed resource was close to 700,000 ounces. We then selected another area and acquired the license in 2011. We were very grateful to the government, as this was the first license to be issued for gold mining since Kenya’s independence.

We went into production immediately, upgrading the facility that was there. The gold price has been a major challenge and we had to reduce staff numbers over the years. For a period, the operations were put under care and maintenance. However, we are now out of that, and the gold prices are looking up. Our production is still relatively low, producing between five and ten kilograms of gold every month, but last year we decided to expand the company. This expansion is currently underway with the objective to crush around 3,000 tons of ore every month. This is a huge step up, and our long-term target is to crush around 6,000 tons per month. Some of the required equipment has been mobilized from Ghana. We hope that by December the new plant will be fully operational.

Goldplat also has operations in Ghana and South Africa. How does Kenya’s business environment compare, particularly with regard to investor support? Continue reading →

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.

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KENYA Special

Deloitte is very well established globally. How does the company serve East Africa’s mining industry?

Deloitte East Africa has its headquarters in Nairobi, Kenya, but also has offices in Mombasa, Tanzania, Uganda, Ethiopia, Rwanda and Burundi. We draw on our wide global network to serve extractive players, including the upstream petroleum and mining companies. We are dominant in the extractive space in East Africa and serve most of the licensed companies and their subcontractors.

In Kenya, we have had recent discussions with the Cabinet Secretary for Mining, who is very passionate and enthusiastic about the industry, and has proposed to formulate a six pack model – a one stop depository of all policies relating to country’s mining sector. We have emphasized to him the necessity of having in place a comprehensive and holistic mineral fiscal policy as part of his six pack initiative that will inform the evolution of the country’s mining taxation and fiscal regime going forward. We await to see how this will be implemented.

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