Bouncing back

AFTER some tough years, Australia’s Mining Monthly Awards Mining Contractor of the Year winner Swick Mining Services is preparing for the upswing.
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Swick Mining Services managing director Kent Swick.

Noel Dyson

SMS managing director Kent Swick told AMM contract rates were starting to come back up after several years of being forced down.

"Four out of five contracts have had rate increases," Swick said.

"We're also seeing more demand from our existing clients. I think budgets have expanded again. I don't think there are too many underground rigs sitting idle."

During the tough times SMS learnt to operate lean.

It worked on power upgrades for its rigs and created new hydraulics designs for them to improve their operating efficiency and implemented increased automation to reduce the number of staff underground.

While those works were done to keep the business going through the tough times, they will help SMS grow its margins as rates rise.

Sure, Swick is happy to see the rates start to come back up but he would like to see some more movement on that front.

"We'll have to continue to work with clients to get the rates back up to where they need to be," he said.

Swick said the efforts to reduce the number of staff underground had a couple of benefits for clients.

Firstly, it increases safety because fewer people underground means fewer people in harm's way.

Secondly, it means fewer people on site. That means fewer seats on planes to the operation and fewer beds needed in the camp - all cost savings for the client.

Swick insisted SMS' mobile underground drilling rigs benefitted the client because the rigs were more flexible than the skid-mounted ones most of its competitors were using.

"You need about 30% more skid-based rigs to keep up with mobile rigs," he said.

"We can drill 1500m-plus holes with our rigs. We can drill deep, deep exploration holes as well as do grade control for the clients with the same rigs. 

"That means they don't have to get specialised contractors in."

While the SMS board is not prepared to let slip the tight control it had exercised on capital expenditure, Swick said the company would manufacture more rigs as client demand dictated.

"We're just not going to add fleet for fleet size considerations," he said.

SMS is also committed to its North American sojourn.

Swick admitted the company probably underestimated the challenges it would face there but it was starting to make some inroads.

"We're getting some traction in the US," he said.

The company is working at two mines for Barrick in the US - Cortez and Turquoise Hill.

Besides North America, SMS is also moving into exploration technology with its purchase of Stockholm-based research and development company Orexplore.

"We've been involved with it for five years," Swick said.

"We have a lab set up in Bassendean and we'll be launching the product probably in late March or early April."

Swick said the technology could "see right through the rock".

"It can see all the individual structures," he said.

"It can see where the elements are distributed through the rock."

It can provide five different levels of information: assay, structure, mineralogy, lithology and density.

"It can give you the specific gravity of every meter of rock," Swick said.

"This is a much better analysis of grade. It looks at much more rock than a lab does."

The plan with Orexplore is for a team to set up on site, probably in the core lab, and run analysis.

The results of that analysis will likely be ready for the client by the start of the next shift after drilling.

SMS will help grow the business initially, although Swick expects it will be spun out into its own entity before too long.

He admitted the business model for Orexplore was markedly different to SMS' so while it was okay for SMS to act as an incubator for a while, Orexplore would eventually have to leave the nest.