FRACKING BOOM HELPS ARCILLA MINING DOUBLE PRODUCTION, AND IT RELIES ON HEAVY IRON AND SMART FINANCING TO KEEP MATERIAL MOVING.
By Mark S. Kuhar
Under the surface of the southeastern portion of the United States is a 350-mile stretch of kaolin clay that pulses life into the mining industry with its versatility. The soft clay is used to manufacture a number of products, including paper, paint, plastics, fiberglass, rubber, ceramics and most recently, as an injected solution for hydraulic fracturing.
Along this ribbon of kaolin clay sits one of the southeastern United States’ largest mining companies – Arcilla Mining & Land Co. – a company that combines the power of geology and genealogy.
Owner and CEO of Arcilla Mining, Ted Smith, is the son of a well-respected geologist. Smith’s father’s commitment to his craft, and his professional philosophy of operating with honesty and integrity, served as inspiration to Smith as he grew older. After 15 years of engineering and survey work, Smith embarked on his own business ventures, and founded Arcilla Mining & Land Co. in 1992.
Headquartered in McIntyre, Ga., Arcilla Mining has experienced considerable growth since its inception. In 2001, the company expanded into Alabama counties with kaolin deposits. Four years later, it expanded into Arkansas via its subsidiary company, Southeast Mineral Corp. of America, where the company harvests bauxite, and in 2007, it stretched into kaolin-rich areas of South Carolina.
As the company grew in geography, its genealogical story grew as well. Smith’s oldest son, Kevin, has been with the company for 15 years, managing the service and maintenance side of Arcilla Mining, while son Ashley oversees the acquisition and development of mineral holdings. A third son, Garrett, joined the company as quality control manager upon graduation from college in December 2013.
Responsibility Requires Reliability
With an operation that stretches across four states and employs 155 individuals, Smith has his eye on multiple moving targets at all times to keep production in process. The company now owns or controls nearly 30,000 acres of land along the band of kaolin clay, but only 300 of those acres are actively mined at any time. The properties are continuously opened and closed as the mineral is harvested in full, following which Arcilla Mining restores the land to its natural, productive state.
“What separates us from the rest of the industry is that we own or lease the land and its minerals – we are committed to turning it back into something good,” said Smith.
Arcilla Mining & Land Co. drills with its own rigs, has its own testing capabilities, and completes Environmental Protection Division and Environmental Agency permitting via in-house resources.
It’s a big responsibility that requires reliable machinery.
“We do all in-house stripping and in-house loading with mostly Volvo construction equipment,” said Smith. The transportation of the materials to processing plants more than 100 miles away is completed by a fleet of 55 Mack trucks, a subsidiary of the Volvo Group.
In total, Arcilla Mining uses more than 125 pieces of heavy equipment, including 30 excavators, 18 bulldozers, 18 off-road trucks, 10 motor graders and 50 highway trucks.
With the vast amount of equipment the company operates, Smith said that having a good relationship with his Volvo dealer, ASC Construction Equipment – and by extension, a solid relationship with Volvo Financial Services, is vital.
Making sound decisions about not only the equipment purchased, but the way in which it is purchased, helps ensure Smith’s business has the financial foundation to continue its solid growth.
Deric Cameron, district finance manager for Volvo Financial Services, works closely with ASC Construction Equipment to establish flexible programs for Arcilla Mining.
“As one of the largest global captive finance companies, Volvo Financial Services takes the time to understand its customer’s needs and we have a vested interest in creating customized solutions for Smith and his company that make financing his equipment – and growing his business – as easy a process as possible,” said Cameron.
Smith said that the flexible, custom solutions Volvo Financial Services establishes for him have helped him do just that, and that the 20-year relationship developed with ASC mining key account manager, Charlie Roupe, has allowed Smith to have honest conversations about his equipment requirements with a trusted source. This is a quality that has become increasingly important as his business has experienced incredible growth.
“We doubled our production in the last few years,” said Smith, noting the expansion has been due mainly to the growth of hydraulic fracturing or “fracking” across the country, and the resulting demand for kaolin clay that is used in the fracking process. “And,” Smith continued, “we expect to double again in the next three or four years.”
The rapid expansion has meant rapidly growing equipment needs. In the past two years alone, Smith has acquired more than 10 pieces of Volvo equipment to help meet production demands. This growth is requiring Smith to not only make smart decisions about the equipment he purchases, but requires his machines be “smart,” as well.
Smith puts the Volvo CareTrack telematics system and MATRIS analysis to work on his equipment, allowing Arcilla’s extensive in-house service and maintenance department to be proactive about service, maximizing uptime and reducing wear and tear on the machines.
|Arcilla Mining and Land Co. is a true family effort. From the left, son Ashley, father Ted and son Kevin Smith.|
Smith is quick to admit that business has not always been as sound as it is today, and helping his company survive through the tough times has required strong long-term relationships like they have developed with ASC. “They came through the hard times from 2007 through 2009 with smart management,” said Tom Moore, ASC Construction Equipment’s general manager for Coastal South Carolina and Eastern Georgia. “They were buying used machines to keep equipment costs down, but then realized they needed to look at new equipment.”
Making a change toward the new equipment has helped decrease maintenance costs and downtime for the company. “Finding solutions that help Arcilla Mining continue to successfully navigate its growth is key,” Cameron said. “Whether pursuing general financing or leasing, providing Arcilla with flexibility has been crucial.” He continued, “Our goal remains to provide Ted and his company with financial options that are designed specifically for him, getting him the products he needs with financial solutions that help him reach his next set of business goals.”
Whatever that next set of goals, Arcilla Mining can rest easy in knowing the company already has much to celebrate, having come through industry challenges, remained true to its core family ownership, and grown with the same set of values Ted Smith’s father set before him. The company continues to mine for kaolin and bauxite, but its continued growth proves they struck gold in staying true to its principles. E
Information for this article courtesy of Volvo Financial Services.
|350-mile belt of kaolin clay deposits where Arcilla Mining operations are currently active.|
In 2013, U.S. production of kaolin clay exceeded 5.9 million tons. More than half of the kaolin clay extracted from U.S. deposits was used for purposes other than paper production, including the processing of ceramic proppants used in hydraulic fracturing.
Hydraulic fracturing is the process of drilling for natural gas and oil in subterranean shale rock. Proppants are the materials mixed with water to “prop” open the cracks or “fractures” in order to release and collect the natural resources from underground.
Once kaolin clay has been extracted, it is transported by truck to a ceramic proppant processing plant. The kaolin is then transformed into ceramic beads through a multiple step process that often includes mixing, grinding and drying the clay in high-temperature, refractory lined kilns to calcine and harden the clay. Rotary coolers are used to cool the particles before processing through a vibrating screen to separate by size and shape.
Ceramic proppants are marketed based on size, sphericity, conductivity, flow capacity and other preferred factors as determined by each processing plant.