Explosives Manufacturer’s Profits Boom in Mexico

For centuries, black powder was the only explosive available for industrial applications. It was not until the advent of the Industrial Revolution in the late 19th century that a range of explosive innovations began entering the market. Many modern explosives such as nitratefuel oil mixtures and ammonium nitrate-base water gels, which now account for a majority of the explosives market in developed countries, have only been around for 60 years. With the help of such innovations, the need for human and mechanical strength in mining has greatly decreased, and the supply of explosives has become a profitable market in which only the strongest survive. One such contender is Austin Powder, the only large explosives manufacturer in the world that is still owned by a group of private investors.

For over 175 years, Austin Powder has been serving various industries that use explosives. The company has been operating in Mexico for over 17 years, acquiring DuPont’s assets within the country during that time. These included parcels of land, manufacturing plants, and some key production formulas. In 1997, Austin Powder formally constituted DuPont under the name Austin Bacís. In the last ten years, it also acquired some smaller explosives distribution companies in charge of distributing explosives by Dyno and Orica, as well as its own products. The strategic locations and the established permits held by these companies were useful in simplifying the operations that Austin Powder was keen to conduct in Mexico. The company now services major players in the mining industry, namely Peñoles, Fresnillo, Grupo Mexico, and Minera Frisco, among others. Ricardo Moreno, Director General of Austin Powder México explains how the company’s clients in the mining industry depend on the quality of its products. “We have been servicing all these major companies for several years and their expectations are all the same. They want explosives to have the right performance, to come at the right price, and they want us to provide the right service in terms of efficiency and safety. The explosives that we manufacture have high safety parameters since they are manufactured with the most up-to-date formulas and equipment in the world. We also have one R&D department in the US and another in Europe, both of which are constantly working on improving the emulsions that are manufactured here in Mexico.”

SEDENA has heavily regulated the sale of explosives in the country, meaning that Austin Powder must adhere to strict procedures across its range of business practices. “SEDENA has demanded that every single stick and box is branded with a serial number, so if stolen explosives are later found by the military, they are able to track them back to the manufacturer to find out which customer was responsible for them,” explains Moreno. If Austin Powder did not keep track of this information, then the company would be operating outside of the legal framework and be faced with a considerable fine. Considering that the explosives manufacturer produces over 9 million sticks per month, the obligation to keep track of each individual one represents a huge responsibility.

While the end result of a controlled mine explosion is fairly similar, namely the creation of open space through the removal of large quantities of solid material, Austin Powder’s product range bears some variety. Its portfolio contains different explosives and formulas for specific applications. Moreover, the company’s engineers are able to calculate the vibrations resulting from a blast by running detonation simulations. These also help to determine how the rocks within the mine will behave, as well as the size of debris produced by the explosion. This analysis is essential to ensuring damage avoidance in its customers’ facilities and deciding which explosive to supply for each specific set of circumstances. It is not just explosives that Austin Powder supplies. Initiation devices, which provide comprehensive, influential control over the detonations, represent around 25- 30% of the accessories used by the company for explosions in mining. Other significant products include water gels, which have almost entirely displaced dynamite in the commercial market, and emulsions, which possess explosive characteristics of minimum diameter and detonation rate when compared to the various grades of dynamite. “Mining companies are still demanding regular explosives to develop their mines,” Moreno explains. “They need them to create underground mine shafts and to expand surface mine pits. Yet, to make operations more cost-effective, companies are looking for powerful and controlled explosives that do not require many sticks. We recently developed a product that meets those requirements, it is called Hydromex and is already available on in the market.” On the emulsions side, the company has invested US$18 million in a facility that will manufacture new products, including Emulex 1, Emulex 2, Emulex C, Hydromite 3, Hydrox S and Hydrox U. Austin Powder is now looking to expand its market into the bulk emissions used for large open pit mining. As a company that is well acquainted with the mining industry, it is in a strong position to achieve such a goal.