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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Page 60 of 113 ROCK products • February 2019 • 57 EQUIPMENT & TECHNOLOGY DRILLING & BLASTING 3. New Technology – If you have an older drill rig fleet, buying a new drill rig provides an opportunity to drill more productively for more meters. Newer rigs are generally more productive, provide more reliable uptime, and have a lot more built-in safety features than older rigs. With increased mine site safety requirements, a new rig can meet those new safety requirements where an older rig might not make the grade and cost a drilling contractor a contract award. 4. Rod Handling Equipment Pays for Itself – Drill rigs with rod handling equipment generally have crews with fewer hand and back injuries, and less overall stress and strain. Mechanized rod handling also saves on labor costs and staffing as an extra crew member is not needed to manually handle rods. Plus, becoming known in the market as the drilling service provider that has updated equipment with rod handling capabilities will likely get you invited to more bids. When rod handling was first introduced, productivity suffered as the machine rod handling was not as fast as manual rod han- dling. However, with the newer technology, productivity can be maintained. 5. Reliability – Used drill rigs typically break down more often than new rigs and that down time can affect hard- earned drilling contracts. The costs can quickly start piling up from loss of productivity, rig uptime contractual obligations, and repairing the drill rig. Not only does the well-maintained operating condition of a drilling fleet help productivity, but it can keep a contractor from getting kicked off a contract or site. 6. New vs. Used Drill Rigs – When one finds themselves in the market for another drill rig, the first question is whether to buy a new or used drill rig. It tends to be harder to find gently used equipment, and when in the market for used drill rigs, it's difficult to be sure how well or harsh the rigs were treated and used in the field. Hydraulic systems, for example, are very delicate and if they've been mistreated or there is contamination in the hydraulic system, it can be extremely expensive to replace pumps, motors, or valves. It can be a risky purchase if the history and maintenance of the drill rig aren't known. There were a lot of great buys in the market downturn, but as the market continues to improve, price points are going to increase and availability decreases. 7. Price – When purchasing a new exploration or production drill rig, it can be tempting to shop on price because there are a lot of low-cost options out there. However, just like any other major purchase, it is important to evaluate the total cost of ownership. Lower priced drill rigs can actually have a higher total cost of ownership. Taking the time to price out important replacement parts and spare parts can prove to save money in the long run. The other thing to consider is the availability of those compo- nents. When buying a low-cost drill rig from a company that doesn't have a global footprint, the local availability of spare parts and the lead times to get replacement components can impact your bottom line. Many smaller manufacturers only support customers on a regional basis. The reliability gained by purchasing high-quality compo- nents means not having to replace components as often, which means more uptime and spending less money to operate than if you would have bought something at a lower price point. 8. Timing – Which comes first, the new drill rig or the con- tract win to put it to work? This is a good question and it really depends on lead times. Talking in context of the current market where there is a bit of growth, the competition to win a bid depends on when you can mobilize and get to site to start drilling. Lead time to get onsite to start drilling can be extended if you wait for the contract win to purchase a new rig versus having the rig ready to dill – contractors may want to pre-purchase equipment and go to bid with a drill-ready fleet. This is more important now than it was last year or the year prior. 9. Lining Up Scope and Budget – Major mining companies can mandate technology and safety upgrades and are always in discussions about improving safety, taking advantage of innovations, and implementing technology. You need to have a competitive advantage that meets all of the operat- ing requirements, but anything above and beyond can make you stand out from other drilling contractors. For example, having rigs equipped with rod handling can provide the com- petitive advantage that wins the project. 10. Why Buy New? – Take time to consider your options. Evaluate your current drill rig fleet and consider what it will take to get everything maintained and updated to be competitive. Does your drilling rig take advantage of recent innovations and meet the latest safety standards? If repairs and available parts outweigh returns, look at updating your fleet. The number one reason to buy new equipment versus used equipment is to enhance productivity, improve safety, and enjoy long-term reliability. If all the gains from purchasing a new rig makes sense, talk to an expert to see what is available that meets your needs both now and in the near future. Boart Longyear,

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