Munga-Chinese fight stalls Sh4trillion Kitui coal mine project

Buoyed as one of the remedies to the persistent shortfalls to the national grid, fresh details now attributed the stalled coal mining project at the Mui Basin in Kitui County to sabotage by top Ministry of Energy officials working in cahoots with disgruntled private players dropped as partners in the project.

In damning official correspondences addressed to the both Chief of Staff and Head of Public Service Felix Koskei as well as to the Cabinet Secretaries for Energy, Mining and Blue Economy respectively, the Chinese firm that won the multi-billion tender, Fenxi Mining Industry Company Limited (FMICL) has attributed the delays to government bureaucrats and former local partners.

“Today in Kenya, between 5 pm and 10 pm, we have to do load-shedding. We have to shut off some areas to power other areas because our energy is insufficient… If we have to industrialise and engage in manufacturing, we need a minimum of 10,000 MW of energy,” President Ruto said while meeting with Kenyans living in Qatar adding that Sh1.2trillion is required to expand the country’s power capacity to 10,000MW and ease persistent shortages.

Further, FMICL has issued notice to institute default proceedings on the part of the government for what they term as “refusal and reluctance” by the Kenyan government to grant the requisite consents.

In one of the correspondences, FMICL told Koskei that the implementation and operationalisation of the Mui Basin Coal project has been derailed by government mandarins.

“Despite this, the government has continued to exhibit reluctance and/ or refusal to grant the necessary consents, contrary to the express provisions of the agreement and the legal opinion issued by the Attorney General dated January 20, 2020” A notice of default letter sent to Energy and Petroleum as well as Mining and Blue Economy Cabinet Secretary by FMICL chairman Yang Wu Sheng reads in part. Both ministries received the letters on August 27, 2025.

Yang Wu had also expressed similar frustrations by ministry officials through a letter addressed to Koskei dated August 5, 2024.

“Following the execution of the agreement, we have made several efforts to progress with the implementation and operationalisation of the project. However, these initiatives encountered various hurdles. Neverthless, we remain committed to progress the project and achieve its full implementation,” the letter to HOPs reads in part.

Great Lakes Corporation Limited owned by Murang’a businessman Peter Munga alongside was dropped by FMICL and their joint venture terminated on May 7, 2018 after they, Great Lakes failed to honour their commitment to pay their local venture contribution amounting to Sh388million (USD 3,875,000) and are now regarded as strangers in the project.

According to the agreement, FMICL Chairman Yang Wu Sheng was to contribute the balance of Sh113million (USD 1,125,000) to make a total of the required USD5million.

Official records show that Peter Munga, Joe Kamau, George Kariithi and Li Yu Xin as the directors of Great Lakes Corporation Limited.

“Pursuant to an investors meeting held on March 25, 2014 at the offices of Peter K. Munga in Muthaiga, Great Lakes Corporation Limited has failed to honour their commitment to pay their local venture contribution as per the stipulated deadline of April 30, 202. It has been resolved that our partnership with Great Lakes Corporation Limited and or its directors/ associates/ shareholders namely Peter K. Munga, Joe M. Kamau, Dr. George C. Kariithi and Li Yu Xin be forthwith terminated,” a joint venture termination notice between FMICL and Great Lakes during a meeting chaired by Yang Wu Sheng dated May 7, 2018 reads in part.

Consequently, after termination of the FMICL appointed Dorse Gems International Limited as their local partner and jointly formed Fenxi Dorse International Power Ltd.

Available official records show that after winning the coal mining contract for Mui Basin Kitui County Coal Block C and D, FMICL signed a Benefits Sharing Agreement (BSA) with the Kenyan government on December 23, 2013 after they were awarded the contract on August 24, 2011.

The agreement was witnessed by Fenxi Mui Mining Corporation, a special purpose vehicle jointly formed between FMICL holding and Great Lakes as a special purpose vehicle to undertake “development works”.

At Fenxi Mui Mining Corporation, FMICL held a majority stake of 70 per cent shareholding while Great Lakes held 30 per cent stake.

However, after Great Lakes failed to honour their local venture contribution amounting to Sh388million, the partnership was terminated and Dorse International on boarded as the local partner under Fenxi Dorse International Power Limited.

FMICL notified the Ministry of Energy of the Dorse International as the official local partner vide a letter dated November 10, 2022 signed by their Managing Director Wu Sheng.

In an apparent contradictory policy direction on the matter, In July this year, separately, Energy Cabinet Secretary Opiyo Wanadayi and the then Environment Cabinet Secretary Soipan Tuya who is currently serving as Defence CS said they are working on plans to have the projects halted.

While Wandayi blamed the contractors for the delays despite bureaucrats in his ministry having stalled the project through boardroom secret meetings with “strangers”, Tuya cited potential harm to biodiversity, land rights and public health following sustained protests by local communities and civil society groups.

However, mid this month, while speaking during a Kitui tour ahead of this year’s Energy Week and ahead of the just celebrated Mashujaa Day, which was held from October 13 to 17, 2025, Energy CS Wandayi said that the government is getting the coal mining project at the Mui Basin in Kitui county back on track.

He said it was “well overdue” to restart the mining process, adding that they are going through the necessary permits to pave the way for the commercial mining of coal in the region.

The CS guaranteed the locals that the project would greatly draw out the energy potential of the county and at the same time, it would make people get employed and lead to the rise of new ways of economic activities.

“Mui coal basin is a potential source of energy for different energy mixtures in our country. This government treats with great importance the matter of making the potential of the basin realized in the safest way and in the economic sense as well,” he said.

Ever since, the Mui Basin coal project has been riddled with bureaucratic setbacks working against making Kenya more energy secure.

“The Ministry of Energy in a letter dated March 18, 2014 instructed us to pay a Concession and Training Fund fee. We obliged, but regrettably, our local partner failed to honour their financial obligations and have deliberately sabotaged any progress,” Jinping Zhu, FMICL Kenyan representative laments in one of the correspondences seen by us.