Blasting Industry Consolidates…and Innovates
Carter, Russell A
Market share and regional presence has shifted after the latest round of acquisitions among the major explosives suppliers
The blasting and explosives industry, like the mining industry it serves, is simultaneously getting both bigger and smaller. Just as companies such as Placer Dome, Barrick, Falconbridge, Inco, Phelps Dodge, CVRD-and most recently, Goldcorp and Glamis Gold-have acquired, are looking for, or have become merger and takeover targets, the list of explosives manufacturers has steadily dwindled through similar mergers and acquisitions to include just a few multinational, multiproduct majors and a much larger group of smaller, regional suppliers of various blasting products.
One of the results of explosives industry consolidation is an arms race of sorts, as No. 1 manufacturer Orica and No. 2 Dyno Nobel compete for larger stakes in both established and newly emerging mining markets. For example, Orica announced in late August that it plans to build Indonesia’s first large-scale ammonium nitrate plant in East Kalimantan. Estimated cost of the plant was undisclosed, although the 250,000- to 300,000-mt/y facility would probably resemble an AN plant in Yarwun, Queensland, Australia, at which Orica recently doubled capacity to 572,000 mt/y at a cost of $195 million. The Indonesia project, if approved by Orica’s board of directors, would take approximately three years to complete.
One day after Orica’s announcement, Dyno Nobel said it plans to build a similarly sized $200-million AN plant in Queensland to serve the state’s booming coal industry. Dyno Nobel Asia Pacific already owns a 50% interest in Queensland Nitrates, a 180,000-mt/y plant near Moura. Dyno’s venture partner in QNP is Wesfarmers CSBP.
The purchase of Dyno Nobel Holding ASA in September 2005 by a consortium of investors led by Macquarie Bank, and the subsequent split-off of certain Dyno Nobel assets after the acquisition, resulted in a major shift in the explosives industry landscape. After the Macquarie group completed the purchase of Dyno Nobel for US$1.7 billion, it sold Dyno’s operations in Europe, Africa, the Middle East, Asia and Latin America to Orica for US$685 million, while retaining Dyno’s assets in North America, Mexico, and Australia. At the time, it was estimated that Dyno had a larger share of the North American market (about 40% versus Orica’s 30%), while Orica controlled about 60% of the Australian market compared with Dyno’s 40%. Before the sale, Orica held a slight edge in global explosives market share-roughly 21% versus Dyno’s 19%-but with the acquisition of such a large portion of Dyno’s assets, it appears that Orica is well positioned to increase its market presence, particularly in the developing nations.
Post-sale Dyno Nobel isn’t conceding anything though, announcing in late November 2005 that it would establish a joint venture company in the Urals region of Russia to supply explosives related products, initiation systems and related services to the Ural Mining & Metallurgical Co. (UMMC), the second largest copper producer in Russia, and also its largest domestic copper supplier.
The new company, called Dyno Nobel UMMC, is to be the exclusive supplier to all UMMC controlled mines and will, in addition, serve other mines and quarries in the region. The new company will supply both surface and underground mines operated by UMMC. During the first phase of startup, which began in the second quarter of 2006, plans were to establish two emulsion explosives plants serving the Urals region.
Dyno Nobel UMMC will use Dyno Nobel’s SME (Site Mixed Emulsion) technology in the open pits and Mini SSE (Site Sensitized Emulsion) in the underground mines. With these technologies, no explosives are created prior to charging into the drilled holes-a major improvement in safety and technology for the Russian mining industry. In addition, the company will use Dyno’s Nobel Initiation system and specially designed private-label boosters.
About one month later, in late December 2005, Dyno Nobel America announced that it had purchased Nitrochem Corp.’s nitrogen assets located in Maitland, Ontario, Canada, including three nitric acid plants and two ammonium nitrate plants. These assets will be managed as a new Canadian company called Dyno Nobel Nitrogen Inc.
Improved Electronics for Safer, Quicker Blasting
Despite potential distractions arising from expansion and reorganization, both Orica and Dyno Nobel have continued to provide new or improved blasting products, as have a number of other suppliers.
Orica, for example, has introduced a variety of new blasting technologies over the past year or so, ranging from its Central Blasting System (CEBS) for underground operations and SURBS (Surface Remote Blasting System) for open-pit mines and quarries, to Stratablast, a patented technique that combines both cast blasting and coal blasting into one operation using features offered by Orica’s i-kon electronic initiation system.
CEBS consists of both underground and surface components. Underground, the CEBS components comprise an i-kon logger, digital detonators and Remote Blasting Box or RBB. Surface components consist of a PC-based central blasting software package, a master control “lockbox,” Smart and Master dongles, and a physical key. According to the company, there is no need to install a dedicated communication line because CEBS makes use of the mine’s existing analog phone system; other communication options are currently under development.
Once the detonators have been connected to the harness wire and programmed by an i-kon Logger, the logger is hooked up in parallel to the RBB, which is then positioned at a convenient but safe distance from the blast. This could be any location with mine phone service; a refuge station or a lunch room, for example. Because phone extensions are at a premium in most mines up to four different RBBs can be fired in sequence from one extension on the trunk line and CEBS will work with shared phone lines as well. In addition to initiating the blast, the RBB also delivers complete two-way i-kon system data communication between the detonators and the surface so the operator knows what’s happening right up to blast initiation. Each RBB has a total capacity of up to 12 loggers and 2,400 detonators.
Orica says multiple layers of protective security have been designed into CEBS for complete safety up to the point where the operator initiates the blast underground using his PC. If for any reason the blast has to be postponed or cancelled, it can be quickly disarmed from the surface. After the blast, the RBB detects blast vibrations for 15 seconds and sends confirmation back to the surface before shutting itself down. The CEBS software then generates a final blast report, which includes the time of firing and the vibration results.
The introduction of CEBS last year closely followed that of Orica’s i-kon Surface Remote Blasting System or SURBS, which also allows quarry and surface mining operations to initiate electronic blasts remotely from a central point. SURBS uses similar hardware to that of CEBS, including a Blaster Box 2400R, RBB and dongles, and works with up to 12 i-kon System Loggers, each of which can handle 200 detonators. The system uses coded radio signals on an assigned frequency with two-way communications, including verification of delay time programming and confirmation of full functionality for detonators.
In operation, the RBB writes a unique one-time digital code to a Smart Dongle. The dongle is then inserted into the Blaster Box to activate communications with the RBB. All radio signals are encrypted with the one-time code and specific address of the RBB. The system offers protection against stray signals or RF interference, and if severe interference persists, SURBS reverts to standby mode to allow a safe restart. SURBS also has a test mode which allows pre-checking of the strength and quality of the radio signal from potential firing locations.
Dyno Nobel has developed several new products including the HotShot and Digidet initiation systems. Touted as the world’s first auto-programmable electronic initiation system, the HotShot system-comprises a range of components that include electronic detonators, branch, row and bench controllers, end plugs, blast key, blast cradle and tagger. In order for the system to initiate a blast, the blast key must be inserted in the blast cradle. The password-protected key contains the electronics needed to generate the blasting voltage and encoded firing signals. The tagger is used to test individual and strings of detonators, define hole configuration and design the blast-which involves assigning constant delays between blastholes and individual delays between rows, as well as closed chevron stagger delays. The menu-driven tagger connects to and is charged by the blast crade. The bench controller is placed between the connected blast and the blast cradle, and interfaces two-wire to four-wire communication. The row controller connects rows and indicates the inclusion of a row to the control equipment, while the branch controller handles out-of-pattern holes.
According to the company, HotShot eliminates the need to program each detonator individually; a digital signal sent to one detonator is recognized and then relayed to the next detonator. Its autodetection capability automatically locates individual detonators and creates a visual presentation of the entire blast layout, using the handheld tagger, and automatic programming assigns delays prior to blasting by means of a menu-driven interface. The assigned delays are then automatically sent to the detonators by daisy chaining prior to blasting. The system’s software detects and warns of detonator and harness faults, and highlights blast-design or connector errors.
Dyno Nobel says its DigiDet system is the only electronic initiation system that employs shock tube initiation. The product involves a length of shock tube crimped inside an electronic detonator; when the shock tube is fired it sends a signal to the electronic detonator which is then transformed into electrical energy, activating an electronic timer inside the detonator. This gives the system the simplicity of a shock-tube system, according to the company, while offering the accuracy of electronic timing. Digidet detonators are factory programmed with a range of delay times up to 1,000 ms. These delay times include both the time delay in the shock tube and the delay in the detonator.
One of the more interesting recent developments in blasting technique is Orica’s Stratablast method for combining cast blasting with coal blasting. As explained by Orica Australia’s Tapan Goswami and G.F. Brent in a presentation at ISEE’s 32nd annual conference on explosives and blasting technique held earlier this year in Dallas, Texas, USA, the method combines several blasts in various layers-each layer with a different design and blasting objective-into a single blast conducted within one mining cycle. The layers generally have different powder factors and blasthole initiation delays and sequencing, with a long delay between the blast layers.
The technique was developed and tested in the coal basins of New South Wales and Queensland, and is now being used commercially there. According to the authors, these complex blasts require the use of electronic initiation systems, meticulous modeling, and careful loading and stemming practice-but the savings gained by reducing the number of drill and blast cycles, reduced exposure of highwalls to ground vibration from blasting, improved safety, and overall fewer blast and associated activities are significant.
By Russell A. Carter, Managing Editor
Copyright Mining Media Sep 2006
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