"There is no miner or junior that is not considering hybridizing existing or new power stations by adding more renewables into the mix."

Cedric Fernandez

MANAGING DIRECTOR AFRICA POWER SERVICES

September 13, 2022

Could you introduce Africa Power Services to our audience?

Africa Power Services is a new subsidiary of Delmas Investissements & Participations, a family-owned French holding based in Bordeaux and active in Africa for over 170 years. As a Caterpillar dealer in 11 African countries, two years ago JA Delmas (sister company of Africa Power Services) transferred the engineering, procurement, and construction of power stations business, based on medium speed engines, into a separate subsidiary that became Africa Power Services. Operating as a dedicated entity allows Africa Power Services more independence in terms of the geographies we cover, but also more flexibility around the technologies we use, as we can work not only within the JA Delmas 11 territories in Africa or with CAT equipment, but also with other OEMs.

How has Africa Power Services performed since it was created two years ago?

Over the past two years, we have primarily focused on completing the historical projects transferred from JA Delmas, as well as generating a strong pipeline of new projects. Today, we have more than 600 MW of projects under development, many of which we are confident to close by the end of 2022. Within our inherited and new project pipeline, Africa Power Services is busy working on one of the largest hybridization projects in the mining industry. During the last 15 years, we have gradually installed a hybrid power station (80 MW diesel and 24 MW of PV with a Power Management System) at a gold mine in Mali. Today, our teams are adding 48 MW of solar and 38 MVA of battery capacity. We also work on another contract for the national grid in Guinea-Bissau.

What are the main demand drivers for your solutions and services?

The energy transition is a big game changer for the mining industry and as an energy production services provider, we notice this trend and we are observing the evolution of the requests we receive: more than 50% are for renewable energies. There is no miner or junior that is not considering hybridizing existing or new power stations by adding more renewables into the mix, but there are, of course, challenges. We need to work with the intermittency of renewable power sources and add backup sources to stabilize supply when there is no sun or. For this reason, gas is becoming more popular, the mining industry becoming increasingly eager to switch from heavy fuel to natural gas when feasible. In the next few years, we will be able to tell whether the move from diesel to gas continues depending on the access to gas supply. A stronger supply chain delivering  gas to remote areas is likely to emerge. Africa Power Services works extensively in the gold sector, but also in the bauxite industry in Guinea, and iron ore in Mauritania.

What are the mega-trends shaping the health of the African mining industry?

The energy transition is driving demand for copper, lithium, uranium and rare earths, while the gold mining industry has had two very lucrative years, especially in West Africa. The main challenge for the continent is not the market itself, but the security issues affecting the Sahel region, which is penalizing project development in countries like Mali and Burkina Faso.  

How is Africa Power Services mitigating logistics and security challenges?

Historically, our group has built a strong supply chain network comprised of both international logistics companies and local freight forwarders that we have known for many years. These relationships help us speed deliveries and handle security and other challenges. Unfortunately, security issues are worsening in the region. Mining companies are investing more in securing their sites, while we also take cautionary measures.

Could you walk us through the main growth pillars you identify?

The first is the acceleration of EPC projects by turning our projected pipeline into contracts. Second is our investment in hybrid solutions to help customers produce lower-carbon energy. Our current project in Mali is referential in this sense and I believe it will serve as compelling evidence that hybrid, lower-carbon solutions are bankable. Third, we want to expand on our power production services; we already have a 20 MW operation and maintenance contract on a gold mine in Mali. Finally, to reply to our customers’ demands, Africa Power Services recently invested in a 20 MW rental fleet that will be ready to deploy in Q4-22, in order to offer a full gambit of valuable services.

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