Ex-president, minister fast-tracked Kiwira deal: Existence of documentary evidence revealed

THISDAY REPORTER Dar es Salaam, Wednesday, August 15, 2007.

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FORMER president Benjamin Mkapa and his energy and minerals minister, Daniel Yona, used their powerful positions in public office to fast-track the privatisation of the then state-owned Kiwira Coal Mine Limited and hand over control of the lucrative mine to a private company they jointly formed in 2004, THISDAY can reveal today.

According to our latest findings, within a few months of forming and registering Tanpower Resources Limited, the privatisation of Kiwira Coal Mine Ltd was completed and the firm became Kiwira Coal and Power Limited.

Our sources say this ’fast-tracking’ process was at the behest of the former president and senior minister, who also worked to ensure that Tanpower Resources Ltd secured majority shares in the renamed company. ’’There were various presidential memos and confidential letters from the ministry of energy and minerals - when both Mr Mkapa and Yona were still in office - that gave specific instructions for the fast-tracking of the Kiwira-Tanpower partnership,’’ an impeccable source familiar with the deal told THISDAY.

It has been verified that after overseeing the formation of Tanpower Resources as their joint brainchild in 2004, Mr Mkapa and Yona together sought to ensure that the company swiftly assumed ownership of the Kiwira Coal Mine. ’’It was clear from the start that there was an inordinately vigorous push for Tanpower Resources to take over the Kiwira Coal Mine. And at the time, very few people even suspected the identities of the real owners of Tanpower Resources,’’ the source added.

THISDAY’s investigations have also revealed that at one point, the file containing all Tanpower Resources records apparently vanished from the Business Registrations and Licensing Authority (BRELA) offices for a long stretch of time, to the extent of raising suspicions that it was ’deliberately hidden’ from public scrutiny.

Tanpower Resources currently holds 85 per cent shares in Kiwira Coal and Power Limited, which in March 2006 entered into a controversial, $271.8m (approx. 340bn/-) contract with the state-run Tanzania Electric Supply Company (TANESCO) for the supply of 200 megawatts of electricity to the national power grid. The remaining 15 per cent shares in the Kiwira company are still formally held by the government of the day. At the time of Tanpower Resources establishment, its first listed directors were the then first lady Mrs Anna Mkapa; the then minister for energy and minerals Daniel Yona; Nicholas Mkapa (the president and Mrs Mkapa’s son); Joseph Mbuna (Nicholas Mkapa’s father-in-law); and Evans Mapundi.

Its stated objectives included to ’’carry on the business of miners of coal and iron, to process such coal and iron and generally treat, prepare, render marketable, sell and dispose of such coal and iron or by-products resulting therein in their raw or manufactured state.’’ The company was also licensed to ’’deal with coal mining in order to generate electricity for consumption and sale; to generate power generators, transmitters and general distributors; and to provide power and general projects management, project appraisers and consultants.’’

It has now emerged that with Tanpower Resources at the helm, Kiwira Coal and Power Limited was also given control of a separate, additional area with lucrative coal deposits that was formerly owned by the government. Our sources say the Kabulo Coal Prospect, also in Mbeya Region where the Kiwira mine is located, was wrestled away from the control of the State Mining Corporation (STAMICO) - a government-run agency - and handed over on a ?silver platter? to Kiwira Coal and Power Ltd. Previous studies commissioned by the government itself have shown that the Kabulo area, which lies within the East African Rift Valley system in south-western Tanzania, has proven reserves of up to 14 million tonnes of coal. Before being sidelined, STAMICO had been actively promoting the Kabulo area with the intention of attracting a strategic investor to develop a coal-fired power station.