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Kenya strikes gold and coal!!!

Discussion in 'Kenyan News and Politics' started by Mnairobi, Sep 16, 2010.

  1. M

    Mnairobi JF-Expert Member

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    Sep 16, 2010
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    Published on 13/09/2010


    By Anderson Ojwang and John Njiraini

    Kenya is set to join the league of gold producing countries following confirmation that recently discovered gold deposits in parts of Migori and Narok counties are commercially viable.

    According to the Government geologist in charge of Nyanza, Mr John Waita, the gold deposits can support large-scale mining for up to15 years. He revealed that companies prospecting for the mineral in the counties are in the "preparation phase" for extracting the gold.

    The search for gold has been painstaking as these two men in Kakamega can attest to. Photo: File/Standard

    Waita said the deposits have been found in Rongo and Nyatike, which are both in Migori County and Lolgorian in Trans Mara district, Narok County bordering Northern Tanzania.

    "We are confident of gold availability in the areas and what we will need is support from the communities. We have done our exploration and have our facts right about the availability of the mineral," he told The Standard.

    In Rongo and Nyatike, the prospects of viable deposits of gold were established after companies involved completed exploration.

    "Because of the presence of gold in the said areas after the survey, the companies have moved to the next stage. In some areas when they know the quantity is small, they carry their luggage and move away. That is not happening here," he emphasised.

    Huge impact

    A senior official working with one of the mining companies prospecting in the region was guarded in his response to confirm the reports.

    "There are gold occurrences in Rongo. We know if we are successful and able to start production, it will have a massive impact on the economy of the country," he said.

    The official who works for Abba Mining, and asked not to be named due to the sensitive nature of the data, said studies were ongoing, and added: "If neighboring countries, Uganda and Tanzania have high potential of gold and are mining what about Kenya. We know there are some deposits but we are collecting the data to determine the quantity."

    The official said massive investments in gold exploration were an indication of the interest generated by the presence of the mineral.

    "Kenya has the potential of gold, but the problem is that there are no maps to show the geophysical location of the minerals, and that is what we are doing currently," he said.

    Abba Mining is involved in gold processing in Botswana, Namibia and Mozambique. Other firms prospecting for gold in Homa Bay, Migori and Narok counties are

    Kilimapesa, Afri-All and Mid-Migori. Mid Migori has operated for the last 10 years, and last year, London Based Mineral exploration firm Red Rock Resources Plc sought a 60 per cent stake in it, and signed an agreement with Kansai Mining that owns Mid-Migori. It paid $25,000 (about Sh2million) as a non-refundable cash deposit.

    Afri-All Company has been exploring in Siaya, Bondo and Kakamega in a joint venture with an Australian mining Company. In Rongo, Abba miners have been conducting explorations while in Nyatike, Migori Mint have been on the ground at Macalder.

    Waita said the regions are part of a vast gold belt known as the Archean Greenstone Belt, which is one of the earth’s oldest crust dating 3.7 million years. Its geological features are similar to the Gold Reef in Johannesburg, South Africa, and others in Western Australia and Northern Canada that are known to have gold and other minerals.

    Waita’s statement was confirmed by the acting Commissioner of Mines and Geology, Mr Moses Masibo.

    He told The Standard: "I can confirm the company has identified economically viable quantities of gold in Lolgorian capable of supporting a medium scale goldmine."

    A British company that has over the past three years been prospecting for commercially viable gold in Lolgorian area of Trans Mara recently discovered gold deposits that could earn the country Sh400 million annually.

    Masibo added the discovered gold is of high quality, because it will not require extensive processing.

    Lolgorian is part of the extensive Greenstone Belt of the Lake Victoria that stretches into the Mara in Tanzania, and is believed to have rich gold deposits.

    The company, which is operating in Kenya as Goldplat Kilimapesa Project, is conducting more tests and is yet to finalise regulatory issues with the Government with a view to obtaining a mining licence. The Standard has established the deposits are between 40,000 ounces (oz) and 60,000 ounces. An ounce is the unit of measuring gold with one ounce equaling 28.34 grammes (0.02835kg).

    This means the deposits can support mining of 4,000 ounces per year, with a lifespan of between 10 to 15 years. Going by the current price of gold in the international market where one ounce is trading at $1,246 (Sh100, 926 under current exchange rates), the project could earn the country Sh400 million annually or Sh32 billion in 15 years.

    The amount, say industry experts, is a boom considering small time miners in various parts of Western Kenya according to industry estimates, produce a mere Sh15 million annually, although much of is sold to middlemen at prices well below those in the international market.

    In Tanzania, where the gold mining industry is well established, the country produces between 100,000 and 300,000 ounces per annum.

    Waita said exploration in Rongo began in May this year, and that the technical teams are moving fast and will start production once they have ascertained the quantity. In May this year, during the long rains, small-scale miners in Nyatike harvested gold worth Sh15 million in just two weeks, said Waita, indicating a high presence of the mineral.

    "Small scale miners have been reaping millions of shillings from gold mining in the three districts, an indication of its presence," he said.

    "The discovery in Kenya is small scale but economically viable. It will significantly transform the economy of the area," said Cedric Simonet, the chairman of the Kenya Chamber of Mines (KCM).

    Simonet, who is also the Managing Director of International Gold Exploration (IGE) and at one point was involved with the Kilimapesa project, added the project will employ 100 people directly and many more indirectly once it gets going.

    Until September last year, the Kilimapesa project was in partnership with Goldplat and IGE, but the company assumed full ownership after acquiring IGE’s stake at a cost of Sh203 million. Though Goldplat Kilimapesa already has the consent of the local community to commence mining, it cannot embark on the project before obtaining a mining lease from the Government, and carrying out a land survey of the area.

    A mining lease, which lasts for about 20 years, ensures the company can recoup its investments. Ironically, due to lack of a modern mining law and a clear mining policy, talks between the company and the Government on how to charge loyalty seems to be dragging the issuance of the mining lease.

    "The country needs a clear mechanism for charging loyalty, which should be higher for scarce minerals," said Moses Ikiara, the executive director of Kenya Institute of Public Policy and Research Analysis (KIPPRA).

    Mining Bill

    The current Mining Act, which dates back to the 1940s, has been termed as major block in the development of the mining industry.

    However, efforts are ongoing to present a new Mining Bill in Parliament, while the process of developing a mining policy is in high gears.

    In Migori County, Macalder has been coded as the target area. Others are Kamwango in Rongo and Lolgorian in Trans Mara.

    Western Provincial Deputy Geologist Paul Mwadime also said there were high hopes for gold in the area.

    "Mining exploration for gold in the area started during the colonial days, but the investigation has not been intense as now," said Mr Mwadime.

    — Additional reporting by Renson Mnyamwezi


    The Standard | Online Edition :: Kenya strikes gold
     
  2. M

    Mnairobi JF-Expert Member

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    Sep 16, 2010
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    Kenya seeks investors for coal exploration

    By George Obulutsa

    NAIROBI (Reuters) - Kenya said on Thursday it was seeking investors to explore and develop coal deposits in four blocks in a basin north east of the capital.

    The Ministry of Energy said the areas in question were in the Eastern Province on the Mui Basin, 180 km (112 miles) north east of Nairobi, with a total area of about 490.5 square km.

    Those interested would have to prove ability to raise funds in excess of $100 million for the projects on Block A, Block B, Block C and Block D, the ministry said.

    "To accelerate exploration, exploitation and development of the coal, the Government of Kenya has created four blocks ... for lease to prospective investors..." the ministry said in newspaper advertisement.

    Sixty two appraisal wells -- most on Block C -- were drilled and a feasibility study was done in Block C. Coal seams with thickness of between 0.3 metres to 13 metres were found in 40 of the wells at depths of 20 metres to 320 metres.

    Kenya, east Africa's largest economy, has previously invited bids for drilling of coal in other parts of the eastern region of the country, but has so far had limited success in developing viable coal projects.

    It hopes the coal deposits could be an alternative energy source at a time when Kenya needs affordable power to drive Vision 2030, a plan for industrialisation in 20 years.

    In South Africa, coal mining is a major activity, and about 90 percent of the electricity in Africa's biggest economy is coal-fired and is much cheaper than in Kenya.

    he lion's share of Kenya's power is hydro based, which is unreliable during drought seasons as happened in 2008/9, forcing the country to rely on costly diesel generators.

    DRILLING FOR OIL

    Separately, Australia's Pancontinental Oil & Gas and its joint venture partner Origin Energy plan to drill an exploratory well on Kenya's offshore Block L8.

    Although Kenya has no proven oil reserves, exploration interest is growing after the discovery of commercial oil deposits in neighbouring Uganda and natural gas in Tanzania.

    Earlier in the month, Pancontinental said it had received processed 3D seismic survey results for the block.

    "The new 3D mapping will take two to three months and will locate a drilling site. Water depth over Mbawa is about 800 meters, easily within the range of modern drilling and production equipment," it said in a statement seen by Reuters on Thursday.

    Pancontinental said the Ministry of Energy had given it three more months on their current license to allow for a final 3D interpretation.

    "The joint venture participants are talking to a number of large international companies to farm-in for drilling Mbawa. Drilling is currently planned for 2011," it said.

    Pancontinental has a 25 percent interest in the Block L8 licence while Origin holds 75 percent. Pancontinental also has a 40 percent stake in the adjacent Block L6 licence.
     
  3. C

    Certified Member

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    Sep 16, 2010
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    :smile-big: He He He.......... I initialy thought that there was an athletics competition somewhere.
     
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