Full blast: Orica considers expansion Andrew Trounson November 13, 2006 EXPLOSIVES giant Orica is considering expanding into the open-cut mine blast drilling business as it pursues a full-service model in the provision of explosives to the mining industry. Rival Dyno Nobel has already bought drilling assets in the US and Canada. The latest was the acquisition of Florida-based Angelini Blasting in September.
Orica has been sceptical about the merits of moving into blast drilling, which, unlike deep exploration drilling, is a less sophisticated business and so has only low margins.
But as the business of blowing up dirt and rock becomes itself increasingly sophisticated, the need for precision blast drilling could make it more attractive.
Orica reluctantly found itself having to become a blast driller by default after a provider went out of business at the Stockton coal mine in New Zealand where Orica was providing the explosives. But the move to bring blast drilling in-house proved such a success that Orica is now looking at whether it is worth expanding elsewhere.
"We are still determining whether we want to be in drilling or not. We have made a success of it in NZ - maybe we can make a success of it elsewhere," said Orica global technology manager for mining applications Stephen Boyce. "The jury is still out."
Orica and Dyno Nobel are seeking to become fuller service providers and are offering mining companies more sophisticated blasting technologies, including electronic detonations that allow computer-monitored sequencing of thousands of individually micro-timed detonations in just one blast. This allows miners to blast away dirt and rock while minimising damage to mineral seams. Waste rock can also be blasted away into specific areas where it does not have to be moved again.
In Australia, the two main blast drilling providers are Western Australia-based Ausdrill and Brandrill, both of which blast drill as part of their wider drilling businesses.
While exploration drilling involves having to drill down hundreds of kilometres while monitoring the various rock types, blast drillers only go down a few metres, drilling holes that can be filled with ammonium nitrate explosive. While the margins are lower, it is a steady business, commonly done on long-term contracts.
Although Dyno has moved into drilling in North America, no such moves have been made in Australia, and Ausdrill chief executive Ronald Sayers is sceptical about the benefits for Orica or Dyno of moving into blast drilling.
"We should stick to our knitting and they should stick to theirs," he said, noting that the likes of Ausdrill had the necessary expertise to provide contract drilling services.
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