NAIROBI: The vast mineral resources in Kitui County have seen several firms work overtime to elbow out their rivals in a bid to stake a claim to the billions of shillings buried underground. The county is endowed with huge reserves of coal in Mui Basin, with a Chinese firm, Fenxi Industry Mining Group, winning the concession to mine it. There are also enviable iron ore deposits in the county’s Ikutha district.
But it is the discovery of limestone deposits in Kanziku, Mathima, Simisi and Ngaaie areas that has more recently drawn the attention of some of the region’s largest manufacturers looking to expand their business portfolios. Some of the reserves are said to hold enough limestone to last cement companies more than 50 years. East Africa’s economic growth is largely centred around infrastructure, which has contributed to the region’s biggest growth spurt in three decades.
In Kenya, cement consumption, a key indicator in the construction industry, increased 21.8 per cent in 2014 to 5.2 million tonnes. The construction sector as a whole registered 13.1 per cent growth last year, according to the 2015 Economic Survey, which attributed the performance largely to increased investments in road and rail construction.
Limestone is a central element to this sector. The mineral is burned at very high temperatures to make clinker, which is then mixed with gypsum to produce cement. There are two types of cement plants: an integrated plant, where clinker is produced and then mixed with gypsum to make cement; and a grinding plant, where clinker is either imported or bought locally from a competitor who has it, and then mixed with gypsum to produce cement.
Those who have access to limestone deposits have a competitive advantage as they can produce their own clinker, which means they hold on to a larger share of profits. Most manufacturers import semi-finished cement or clinker from China and the Middle East, and then grind it into cement. In 2012 alone, more than 1.2 million tonnes of clinker were imported.
The bottom line is the greater the amount of cement a factory can churn out, the bigger the potential it has to play a central role in East Africa’s infrastructure-driven growth.
