This Brand New Coal-Producing Nation to Start 2015

I’ve been talking a lot lately about the big shifts going on in the thermal coal market.

And how they could open opportunities for new producers to grab market share. Replacing more established miners who are being pushed out by new regulations and low prices.

This week we got a suggestion on who that might be. With one upstart producing nation announcing it intends to join the global market soon.

Kenya.

Xinhua quoted the Kenyan chief geologist for the Ministry of Energy and Petroleum, John Omenge, as saying that the country’s first-ever thermal coal production could come as early as 2015. 

All approvals should be secured by end of 2014 in order to pave way for coal mining,” Omenge said.

He was referring mainly to one of the biggest and most advanced coal development projects underway in the country. The mining of the Mui basin, southeast of Nairobi. Where Chinese firm Fenxi Mining has been working toward the start-up of coal production.

The prize here could be significant. With Mui thought to hold as much as 1 billion tonnes of recoverable coal.

Little information however, has been released about the quality of this coal. Leaving it open as to whether such supply could be sold into markets like China, under new import rules recently imposed by the government.

Whatever the case, any exports here should get interest from buyers in key markets like India. Which will be one of the closest major consuming centres to Kenya.

Of course, we’ll have to see how the overall development proceeds here. After all, there were high hopes for coal exports out of Kenya’s southern neighbour Mozambique–which have hit the skids of late because of limited transport infrastructure in the country.

Kenya’s coal fields are likewise located well inland. Meaning that routes will have to be worked out to get mined supply to the coast in order to export it.

We’ll see what progress is made. Definitely a spot to watch.

Here’s to a coal star being born,

Dave Forest

dforest@piercepoints.com / @piercepoints / Facebook

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