When your business is tied to the value of metals, you must be able to adapt and learn to ride the waves that raise and lower the prices over time.
CAUSA Perforaciones Mineras (mining drilling) has been able to stay on top of the precious metal markets since Gabriel Elizondo and Jose Cerrillo founded the company in 1978. Elizondo, one the founders and CEO of the company explains that they had to take a variety of measures to stay in the game. “This company has gone through the same fluctuations as the mining industry has with the rise and fall in the price of gold and silver,” he says.
“When the markets were down, we had to reduce employees and expenses and make sure our equipment was kept in shape and ready to go when the demand went back up,” he explains.
CAUSA uses two types of drilling equipment: diamond drilling and raise borers. Diamond drilling is used for geological exploration of an area, to probe the contents of ore deposits and potential sites. “The initial phase of a mine is done with diamond drilling,” explains Elizondo. “Later on, we bring the raise borers to add ventilation to the mines.”
The raise borers are used to drill large diameter holes in hard rock. Mining companies make chimney-type holes for ventilation. These holes can be from six to 12 feet in diameter and a variety of lengths.
The past three years have been busy for the drilling company thanks to the boom in the Mexican mining industry. According to The Silver Institute, Mexico overtook Peru in 2010 to become the largest producer of silver in the world. This surge in production increased the demand for CAUSA’s services. “We are very busy now and we have equipment all over the country in different mines and hydroelectric projects,” he notes.
The drilling company recently finished a project in La Cienaga mine, in the Peñoles area, where they established a new record for themselves. “We just finished a borer 420 meters long and 12 feet in diameter,” Elizondo says. “It’s not the longest we’ve ever done, but it is definitely the widest.” The mine needed this large ventilation system to air out exhaust fumes from the equipment they use inside. “They work with a lot of internal combustion equipment inside the mine, diesel combustion equipment, and they needed the chimney to extract gases.”
In the Fresnillo area, CAUSA drilled the longest borer it has done until now. The Saucito mine has a 550-meter-long borer with a 10-foot diameter.
But not all the company’s projects revolve around mining. The company just participated in the La Yesca Dam project, in Jalisco and Nayarit. This 3 billion-peso investment is the second largest dam in the world. The dam will capture the waters of the Bolaños and Santiago rivers and will generate 750 megawatts, enough to light 12.5 million 60-watt light bulbs.
“Our development plans are tied to the growth of the mining industry in Mexico,” Elizondo explains. “If the industry continues growing at this rate for the next four or five years we will increase our equipment and our employees 20 to 30 percent.”
The company was able to grow 40 percent in the last three years both in sales and equipment, according to Elizondo. The growth in equipment is slow due to the specialized machinery they require for raise boring.
“If we want to buy a raise boring machine, we have to wait nine to 11 months,” he says. “If a mine approaches us now and wants us to do work for them, they have to wait until we can have the equipment shipped, we just can’t take the machines we have out of their current mines, the clients won’t allow it.” EMI