Bamburi eager to resolve Mutomo row

February 10, 2009
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, NAIROBI, Kenya, Feb 10 – Cement manufacturer Bamburi Cement has expressed its eagerness to have the row over the limestone mining rights in Mutomo District with its competitor Athi River Mining (ARM) resolved quickly.

Bamburi Stakeholder Relations Manager Mercy Nderitu told Capital Business on Tuesday that the impasse in which the two cement manufacturers are claiming exclusive rights to extract limestone was being addressed and hoped an amicable decision would be reached soon.

“There have been hurdles and together with other stakeholders at different levels, we are doing our best to find a solution,” she pledged.

The controversy stemmed from a decision by the Kitui County Council to grant Bamburi Cement the licence to extract the billions of shillings worth of limestone but the resolution was immediately challenged by Athi River which argued that proper procedures were not followed and demanded a level playing field.

Bamburi controls a 59 per cent share of the local cement market and owns 54 percent of the East Africa Portland Cement Company. ARM on the other hand has an 11 per cent share while EAPCC holds the reminder.

The stalemate between the two companies has in the past forced the government to intervene and saw Vice President Kalonzo Musyoka issue a one-month ultimatum to the rival firms to bring the legal tussle to an end. The ultimatum, which was issued in December last year has however not been met.

“It’s very difficult to give an indication when the dispute will be resolved,” Ms Nderitu admitted.

Efforts to get a comment from the Athi River Mining over the issue were unsuccessful by the time of going to press.

Mutomo is one of several areas throughout Kenya where residents are facing severe starvation despite sitting on billions of shillings worth of limestone deposits.

Stakeholders have therefore called on the two firms to resolve their differences so that the local community can benefit from their local resources.

While issuing a statement in Parliament, Local Government Assistant Minister Njeru Githae revealed that the company had appealed to the Head of Civil Service Francis Muthaura to intervene in the matter.

Observing that there was an urgent need to eradicate poverty in the area, Mr Githae requested all stakeholders including the local Members of Parliament to plead with the two parties involved in the tussle to withdraw their suits.

Ms Nderitu concurred that the project portends great benefits not only to both the local residence but to the economy as well.

“Indeed, there is a great deal at stake for the residents and the country including job and wealth creation, infrastructure development and tax collection,” she said.

Ms Nderitu added that despite the impasse, Bamburi – where Lafarge of France owns majority shares – has already set aside Sh200 million for the exploration process to determine the quality and quantity of limestone available in the area.

“So far, we have spent Sh40 million which in itself is a key indication that we are serious about this project. We are already done with phase one of drilling and prospecting and are currently in phase two which is basically making sure that what was found in phase one is satisfied in the second round,” she explained.

Once this process is over and the viability of the project is proven, the company plans to put up a factory to process the limestone, which constitutes about 80 percent in cement production.

“It will take about two years from construction for a plant to start operating. It will therefore not be fair to speculate on what the setting up (of the factory) would mean to the cement industry,” she said when asked whether it would lead to a reduction in cement prices.

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