Private equity fund Agile Capital’s investment in consulting and engineering services business Bluhm Burton Engineering Group (BBE Group) serves as a prime example of the company’s strategy to aggressively drive expansion into African markets through its portfolio of companies, Agile Capital CEO Tshego Sefolo informs.
The investment was completed mid-2016 and will provide BBE Group with an institutional shareholder of reference who is invested in the business for the long term.
Sefolo enthuses that this investment “represents an exciting opportunity for Agile to invest in a mining support services business with high growth potential, combined with performance resilience, given the importance of air cooling and energy savings in underground mining”.
BBE Group is a market leader in mine ventilation, refrigeration engineering and mine energy management.
He notes that Agile perceived this as an attractive investment for a number of reasons. This includes BBE Group’s strong management team, a proven track record of consulting and executing large projects for its client base, and multiple years of combined engineering experience across different disciplines.
Sefolo indicates that Agile constantly seeks new markets where the company can grow its investment portfolio. BBE Group is well poised for growth outside South Africa, in the rest of the continent, as evidenced by its considerable current spread of projects in Mali, Zambia, the Democratic Republic of Congo (DRC), Tanzania and Ghana.
Recent and current projects include a pair of refrigeration and surface bulk air cooling (BAC) stations at a mine in Mali; a new surface refrigeration plant and BAC supplying cold air for a dedicated cold shaft into a mine in Ghana; as well as the managing of other projects in South Africa. “This installed base represents the largest source of future business,” notes Sefolo.
In terms of opportunities on the continent, there is a current substantial interest in cobalt, copper, gold and zinc, and a reasonable ongoing investment in exploration. Burkina Faso, Ghana, Mali, Senegal, Côte d’Ivoire, the DRC, and Zambia are noted as the most attractive growth centres, with projects including refurbishment of old existing mines as well as a number of greenfield sites.
Sefolo says there will be a demand for BBE Group’s consulting specialist skills and experiences from mining markets on the continent, as shallow resources are depleting and mines are having to go deeper to contend with this.
Moreover, outside South Africa, there is a notable emergence of junior mine opera- tors to compete with large mining groups, which presents another attractive source of business on the continent.
“Mining in Africa is expanding and, with continuously increasing interest from China and international mining companies, BBE Projects is in a good position to exploit these opportunities.”
While the main opportunities for BBE Group’s growth lie in the rest of Africa, there are some local opportunities. Sefolo highlights the country’s continued energy crisis, where BBE Group is well positioned to capi- talise on the various government incentive schemes to save energy, and the ensuing efforts of significant energy users, such as mines, to save on energy costs.
Agile will drive this growth through its “deliberate strategy” to further international development in the businesses it invests in. Agile is exploring expansion into other Africa markets where cooling and ventilation is a critical requirement for underground mining.