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Thomas Kymer began mining at Pwll y Llygod and Great Forest (near Carway) in 1760, and sought parliamentary approval to construct a canal at his own expense in early 1766.
The Act of Parliament was granted on 19 February 1766. The canal was to run from his coal pits at Pwll y Llygod on the banks of the Gwendraeth Fawr river to Ythyn Frenig, about half a mile (0.8 km) to the west of Kidwelly, where he built a dock on the southern bank of the Gwendraeth Fach river. The Act included powers to divert the course of the Gwendraeth Fawr from Pwll y Llygod to Pont Spwdwr, where the Kidwelly to Llanelli turnpike road crossed the river.
The canal was operational by May 1768.
As built, the canal was about 3 miles (4.8 km) long, and the channel was approximately 26 feet (7.9 m) wide. Wider sections were constructed at Morfa and at Muddlescombe, to allow barges to pass one another, and there was also a wider section below the terminal wharf at Pwll y Llygod, to allow the barges to be turned. From the wharf, a tramway crossed the Gwendraeth Fawr to connect with the coal pits.
The canal served the mines well for almost 30 years, but the dock and river were affected by silting., A new channel across the sands was created in 1797, but this too was affected by silting, and by 1809 navigation to Kymer's dock was becoming dangerous.
A series of meetings took place in 1811 to consider how the situation could be improved. Two engineers, Edward Martin and David Davies, proposed an extension of the canal to the top of the Gwendraeth valley, and another which would cross Pinged marsh and would terminate at Llanelli. This would pass through Pembrey, providing improved access to the harbour. The proposal was adopted, and an Act of Parliament passed on 20 June 1812 created The Kidwelly and Llanelly Canal and Tramroad Company.
The Act envisaged an upper terminus beyond Cwmmawr at Cwm y Glo, and a series of feeder canals or tramroads to connect to the pits and levels where extraction of coal was taking place. It listed a total of 13 collieries which would be served in this way. Wharfs at the Llanelli terminus would be built next to the dock owned by the Carmarthenshire Railroad Company. Special provision, including the construction of a lock and weir, was made for the point where the new canal would cross the existing Ashburnham Canal.
The Kymer Canal thus became part of the Kidwelly & Llanelly Canal.