The African Business Journal Latest News and Updates: Rigs to rely on

Renowned for its commitment to safety and innovation, Capital Drilling provides comprehensive drilling services to major mining companies across the world.

Australian drilling professionals Brian Rudd and Jamie Armitage created Capital Drilling in 2004 with the aim of building “a more focused, better-run drilling company,” which, unlike the majority of its competitors, would put African projects first. “Although we were from Perth, we wanted our focus to be in developing and emerging markets,” says Rudd.

“We believed, and still do, that the most important thing was to know how to support your people with good logistics and high-quality equipment, and we had the experience and skillset to deliver on that in Africa. Many of the international drilling companies we compete with are based out of America, Canada and Australia and, while they buy new drill rigs for operations in their home countries, some send their older equipment to Africa where it is harder to maintain the drills and buy parts. This incurs more costs in downtime as old equipment requires a lot more maintenance, so we took the view that it was worth having the best equipment where it was needed most.

“We still stick with that eight years later,” he continues, “meaning the average fleet of our drill rigs is under four years– we believe it is one of the youngest in the industry.”

Capital has expanded rapidly over the last eight years, from its first project in Tanzania and subsequent jobs in Egypt and Zambia, to fulfilling large contracts outside Africa in countries including Pakistan, Papua New Guinea, Chile and the Solomon Islands. It has regional offices in Mwanza, Tanzania; Cairo, Egypt; Lusaka, Zambia; Nouakchott, Mauritania; and Santiago, Chile.

Throughout, Capital has stayed true to its initial mission to work within emerging and developing markets, where it is able to provide superior support.

Committed to quality

Capital’s frequent replenishment of its fleet is just one element of its commitment to high-quality service and efficiency. The contractor also boasts an excellent safety record, having the OHSAS 18000 Certified Safety Management System established across the Capital group. This results from various equipment innovations, including a system that alleviates the double handling of drilling rods on diamond drill rigs. This reduces the number of trucks needed on a drill site, as well as vehicle exposure on the roads, which in turn reduce the risk of vehicle-related incidents.

“One of the biggest exposures to risk on any drill rig is finger-related injuries, so we use RC drilling rigs that are totally hands free when drilling and pulling out as well as a system that minimises the amount of time that workers need to handle the drill rods,” Rudd adds. “This has reduced workers’ exposure to fatigue, finger-related and lifting injuries.”

In October 2013, Capital was recognised as African Barrick Gold’s ‘Monthly Safety Champion’ for achieving 500 lost time injury (LTI) and medical treatment injury (MTI) free days. More impressive still is the 2,000 LTI free days on Barrick’s Lumwana Project in Zambia that it marked on 25 May 2013. Capital is also one of the first drilling companies worldwide to achieve formal recognition and certification in the SA8000 Social Accountability standard.

With its high standards, Capital is not the cheapest drilling company and doesn’t intend to be, says Rudd. But through its first-class supply chain agreements, as well as its internal systems for monitoring inventory and maintenance schedules, Capital provides high-quality service that will always be good value for money.

Big business

Capital’s professionalism has been noted by Business Magazines in South Africa and has attracted a wealth of high-calibre clients that keep coming back again and again. They include Kinross, who Capital has worked with in Mauritana since 2010 and in Ghana since 2011; AngloGold Ashanti, in Egypt and Tanzania, BHP Billiton in Ethiopia and Chile and Barrick Gold in Tanzania and Zambia. Other large and long-term clients include First Quantum, Centamin, Continental Nickel Limited (now IMX) and Antofagasta plc.

As these long-running partnerships demonstrate, Capital excels at both attracting and retaining business. Rudd attributes these recurrent contract renewals to the merits of its professional and responsible conduct with customers. “Ethically, we do the right thing; we support our crew, we support our customer and our goal is to try and get repeat business as much as possible,” he remarks.

Significantly, Capital is currently working on three of the top 50 gold projects worldwide – AngloGold Ashanti’s Geita, Centamin’s Sukari and Kinross’s Tasiast – and two of the largest copper deposits worldwide: Lumwana operated by Barrick and Kansanshi operated by First Quantum.

Capital has been working with AngloGold Ashanti at the Geita gold mine in Tanzania since 2006, doing exploration, development and, at a later stage, grade control drilling.

“We have had that contract renewed a number of times, and earlier this year won a bidding process for a contract comprising exploration, grade control and blast hole drilling at Geita,” says Rudd.

“That’s a five-year project (which commenced in January 2014). We are currently mobilising some brand new drill rigs to take on the blast hole drilling component of the contract – in fact some of them arrived on site today – in addition to hiring new people and increasing our on-site infrastructure. I think the contract win is testament to the capability of our people who have been working on Geita all these years, the strength of the culture we’ve developed there and our strong relationship with AngloGold – they trust us, and that combined with our competitive tender won us the contract.”

A complete drilling solution

Capital’s contract win for Centamin’s Sukari project in Egypt in 2008 marked its departure from exploration drilling and its movement into grade control and blast hole drilling.

The company has been growing its mining services capabilities since then, including most recently underground drilling in 2012.

“Coming into 2014, the company will earn circa 50 per cent of its revenue from blast hole drilling, whereas true exploration drilling will represent only 6 per cent,” Rudd reveals.

“This new balance gives us stability and enables us to give our national staff long-term career paths; it lets locally based workers know they have a future with us. It means we can train people and pass on our knowledge, and our staff know that if they perform well, their jobs will be secure – unlike in exploration, which can be very seasonal and connected directly to the markets, so that people are typically switched on and off. In the exploration market, it’s more difficult to justify spending money on training someone when you don’t know how long you’ll have them for.”

Speaking of training, Capital is currently providing it at Kinross’s Tasiast gold project in Mauritania, on top of its long-running brownfield drilling services contract for the mine.

“We first started working there in 2010, at which point there were 29 drill rigs operating around the mine, operated by five drilling companies,” Rudd explains.

“As things wound down they retained only Capital Drilling, on account of our safety performance and ability to execute. Kinross’s mining department recently bought a number of RC grade control drill rigs for its own staff to operate, and via our pre-existing relationship they asked us to train their operators on the new rigs. They saw the skillset that we have, and wanted their staff to learn from our experienced team.”

Capital has provided smaller-scale training before through its Capital Support Services subsidiary. But this 12 month contract with Kinross, initiated in November 2013, represents the first time Capital has trained a customer’s own drilling crews.

Capitals long-term goal is to expand Capital’s capabilities further still, perhaps even to the extent of creating its own mining group. But for 2014 at least, its plans remain straightforward.

“We want to continue our focus on existing customers and continued improvement, but also to seek out new opportunities, further into underground and blast hole drilling,” says Rudd. “We will retain Capital’s core value of working in emerging and developing markets, but build it into a total mining services company – capable of providing for all our clients’ drilling requirements.”