Rock Products

FEB 2019

Rock Products is the aggregates industry's leading source for market analysis and technology solutions, delivering critical content focusing on aggregates-processing equipment; operational efficiencies; management best practices; comprehensive market

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56 • ROCK products • February 2019 EQUIPMENT & TECHNOLOGY DRILLING & BLASTING In the mineral exploration drilling business, drill rigs and equipment are critical to winning bids, completing contracts, and making money. Buying a new drill rig is a big decision and many variables and factors affect that decision. The big- gest question one has to answer is, "Will this drill rig make money? Or cost more to own than some other option that can accomplish the same for less?" During the recent market downturn, many drill rigs had been sitting idle, which made it easier to cannibalize components and parts to keep actively drilling rigs running. Most drillers were repairing the rigs they had to keep them drilling with- out investing capital in new drill rigs and technology. Now that the market is slowly increasing, many drilling contrac- tors are making decisions on their fleet as to whether they should rebuild the idle rigs or buy new rigs. Operations managers know which components (engines, valves, assemblies, etc.) need to be replaced and they typ- ically have a fairly accurate idea of the cost to rebuild idol drill rigs in the fleet. If the rebuilding costs are close to what it would cost to buy a new drill rig, they may choose to do a full-blown audit, inspecting each of the drill rigs, evaluating spare parts in stock, and checking maintenance records for a more accurate comparison of the costs to get a drill rig ready to work again. Resources – Besides just costs, other factors include whether the drilling company has the time, talent and capabilities to do an overhaul on a drill rig that has been idle and needs work. An overhaul can take three to four months and requires the facilities, tooling, a labor pool of mechanics with the time (they may already be working on other rigs to keep them run- ning), and the knowledge to get drill rigs ready to mobilize for drilling contracts. Availability – With the improving market, everyone can expect longer lead times – whether you're rebuilding or buying new. When the market is in a decline or really low, inventory is higher, plants aren't as busy building new rigs, and lead times are reduced. As the market improves and con- tracts increase, inventory is lower, plants are busier building more rigs and lead times tend to be increased. Ultimately, lead times vary based on the manufacturer. 10 Considerations When Purchasing A New Drill Rig

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