...Kiwira Coal Mine in Songwe region is set to come back to life with renewed Chinese interest….
From Jaston Binala in Tukuyu, Southern Tanzania.
If there is a project in Tanzania funded by the Chinese during the Mwalimu Julius Kambarage Nyerere era, where China left a lasting mark in both business and interpersonal relations, that place might be Kiwira Coal Mine in the southern highlands of Tanzania.
A half Chinese young lady, born to a Tanzanian Nyakyusa woman and a Chinese father, says she thinks about her father many times although she is aware he may never come back. “He left when I was so young. But I know how he looks like,” Sharida says. “I have his picture.”
The mixed race 27 year old young lady says “I have read lots of material to understand China–so that maybe I could understand my father. The Chinese are focused on the future. They do not dwell on the past. It is therefore unlikely that he will ever come back—if he is still alive that is.” She pronounces his name in Kiswahili as Jajing Taa. The young lady is married, and the husband, Bakari Ally says it would feel so nice to have his father in law meet his grandchildren.
Sharida’s father came to Tanzania in the team of China men who built and operated Kiwira Coal Mine in Ileje District. And a visit at the coal mine found there was apparently more love for China men. Sharida is not the only Tanzanian wishing to see China men come back.
Kiwira Coal mine was virtually a dead business in October 2016 when this reporter toured the complex with permission of the Acting Mine Manager, Eng. Mponjoli Mwakambonja. No coal was being produced, coal silos, the coal processing plant and the electricity generation plant were all silent. Window frames and door frames were rusty and un-cared for, walkways were all dusty while bats had transformed ceiling trusses into homes.
The Acting Mine Manager appointed the Mine Ventilation and Safety Officer, Andrew Frank, to guide tour of this mine shut down about 10 years after management was handed over to Tanzanian nationals.
The Chinese who built the mine managed it themselves for some 10 years after commissioning in 1988. All management problems currently present at the coalmine are rooted in mistakes made by the old board of directors, Frank said,
Frank said problems that befell this mine were created by the Board of Directors who constantly asked for money but did not care about buying spare parts for the various machines in the mine. The board always wanted money but they never cared about buying spares.
“When the Chinese were in charge of this mine they always bought spares for machinery. When the mine came under our control, spares were not bought. And when they were bought, they would not be what was asked for,” Frank said. “That is how this mine was destroyed.”
THE WAY FORWARD…
Government should consider finding a reliable company to manage this mine with ability like the Chinese because we have proved ourselves incapable; the tour guide insisted the Chinese should be considered in the selection because they designed this mine and they understand this business,
The Chinese were invited during the Mwalimu Julius Kambarage Nyerere leadership to explore and develop the coal mine beginning in 1975. Construction begun in 1982 and the commissioning in 1988. The mine includes an underground mine shaft extending five kilometres into a mountain. The Chinese remained at the mine to manage operations until 1997 when management was transferred to Tanzanians.
The government shut down operations at this mine some ten years later. In 2012, Eliakim Maswi, the Permanent Secretary in the parent ministry of Energy and Minerals at the time blamed the mine closure on poor cash flow amid rising operational costs; but Maswi did not explain how the first and largest mine in Tanzania went bust amid ample customers.
Mwakambonja said Kiwira coal mine has always had customers, including industries such as Mbeya Textiles Mill and the Songwe cement factory some 100 kilometers away in Mbeya city. The trouble was that production was not steady.
Frank said electricity is of critical importance at the mine. The Board of Directors always wanted money for other things that had nothing to do with the mine. There were a number of ‘boilers’ generating 6 MW of electricity to run operations in the underground mine. Whenever one boiler stopped working, the amount of electricity produced was reduced. This forced a cut back on production. It got to a point when all the boilers were not functional and production had to stop. There was no money for spares.
In the beginning financial mismanagement was the Board of Director’s fault. Later, the operational management copied the Board behaviour and started to misappropriate too and the company went bust, Frank said.
“If this mine were my father’s mine,” Frank said during an interview, “I would put to task all the people who destroyed this mine. I would have used whatever law my father would have given me to use.”
The World Bank and International Monetary Fund (IMF) instructed the Tanzania Government to privatize state run companies in order to qualify for funds. Kiwira coalmine became a target of the privatization. Media reports back in 2010 suggested that former President Benjamin Mkapa used his position to facilitate a questionable privatization of Kiwira coal mine.
Although the former president denied the reports, it was widely reported Government records showed a private company named TANPOWER Resources Limited was set up by the then President Mkapa and one of his cabinet ministers, Daniel Yona, to swiftly assume ownership of the state-owned Kiwira Coal Mine Limited with very few other people in government knowing what had happened.
It was alleged that Mkapa and Yona used their powerful positions in government to fast-track privatisation of the mine built with Chinese assistance for 14 years, and to authorise the company’s sale to their own company for a mere Tsh. 700m/- (about USD 318,182).
An official valuation of the mine carried out in 1991, put the value of the mine at Tsh. 7 billion/- (about USD 3.2 million) back then. TANPOWER Resources Ltd was registered on December 29, 2004, and within six months acquired majority shares in Kiwira Coal mine. In March 2006, the privatized mine entered into a USD $271.8 million contract with the state-owned Tanzania Electric Supply Company (TANESCO) for supply of 200 megawatts of electricity to the national power grid.
Reacting to media reports the Tanzania parliament cried foul play, and the privatization of Kiwira Coal mine was undone.
“We need a serious investor to bring life back to this mine—not a ‘con investor’,” Frank said. “It would suit us well if the Government would bring a serious investor; even if that investor is from China.
The tour guide said “when the Chinese were managing this mine any spare part that was needed was bought and the mine operated very well. Tanzania is full of graduates roaming around jobless. Here is an opportunity to create employment by reviving the mine.”
The Ministry of Energy and Minerals has announced it is “seeking a joint venture partner to develop the Coal and Power Project at Kiwira. The joint venture partner will provide 100% financing of the project and shall participate in the operations of the project.”
The announcement reads in part: “State Mining Corporation (STAMICO)…owns a Special Mining License (SML -233/2005) within the Ivogo Ridge of the Songwe-Kiwira coalfield which is situated south-east of Mbeya City within Ileje District, 40km north-west of Itungi Port on Lake Nyasa and 100km south of Mbeya city. The Special Mining License is for 25 years since its first issuance and upon expiry it will further be renewed for another 25 years.
STAMICO wants to expand the existing underground mine to produce Coal from 150,000 tonnes to 300,000 tonnes annually. It wants to construction a new opencast mine to produce 1.2 million tonnes of Coal annually, and to construct a 200 MW Power Plant. The parastatal company also wants to construct a 100km transmission line from the mine site to Mbeya City.
Mwakambonja said this is a big project which will take time to complete because it will involve paying compensations to people with farms and houses on the path of overhead power cables destined for Mbeya City. This means the investor coming in must be a serious investor. Frank named China as a preferred source of any new investors, although he said there is nothing wrong with getting one from someplace else.
STAMICO has attempted early this year to mine coal at a newly established open pit section of the mine they call Kabulu, but they do not have sufficient equipment to do it well. They need external funding to do it well. An inside source said the underground mine will not start until rehabilitation has been done in the mine to improve safety. They need logs from a forest to access roof supporting board, for instance, but they have no money to buy the logs.
Some 13 prospective joint venture applicants showed interest in late 2016, according to Mwakamboja but non seemed right. An insider told this reporter one of the applicants was a Kenyan company seeking to produce 400 MW with STAMICO at Kiwira Coal Mine but this same company has failed to produce 200MW in Kenya. This applicant has been dumped.
A Chinese company has shown interest, an insider said during the first week of July, 2017. This prospective partner has asked for costs to rehabilitate the coal processing plant and the reviving of boilers, the insider said. So something might be happening shortly. Kiwira Coal mine might soon be coming back to life.
This feature story was funded by the China-Africa Industrial Reporting Project of University of the Witwatersrand, Johannesburg.