Wisc. contractor thriving as frac sand mine service provider

April 17, 2013

By Luke Geiver | April 17, 2013

Jim Hoffman, president of Wisconsin-based Hoffman Construction Co., is a fourth-generation highway contractor who is using the demand for frack sand in the oil and gas industry to transform his company. Last year, Hoffman created a new mining division, leveraging the project engineers, heavy equipment and experience of his team to help develop a frack sand mining site for EOG Resources Inc., in Chippewa County, Wisc. “Our expertise is in moving dirt,” he says, and the move to becoming a frack sand mining services company was only natural.

Since its start only one year ago, the company has prepared and helped to manage several mining sites, and recently the company signed with Northern Frac Proppants to help the Frack sand supply company develop land owned by Goose Landing Sand Co. LLC. “I own that land personally,” Hoffman said. “Basically it was my grandpa’s old dairy farm. It was a side business to his construction company.” After the farm was shut down in the 60s, Hoffman renovated the site into a cranberry marsh, but when another sand developer brought up the idea of retrofitting the space into a sand mine, Hoffman listened. The site will now be used by Northern Frac Proppant’s mining operations.

To become a frack sand mining services company, Hoffman has had to invest time and money into the growing industry. “We looked at some of the heavy civil work opportunities for companies like ours out in the Bakken oil play, but we realized we could probably best support the play from right here in our own backyard.” Hoffman invested in safety training needed for supplying a workforce to develop mining sites. The company had to shift focus away from the Occupational Safety Health Administration to the Mining Safety and Health Administration, he said. “We had to train all of our workers and bring everyone up to speed on safety requirements.”

The team also implemented its knowledge in highway construction safety protocols, project management and logistics to its mining division. The move has helped the company grow and supplant itself as a proven service provider. “Last year we were moving dirt at 2 million cubic yards per month,” he said. “Our job was the equivalent of laying a one foot wide by one foot tall strip of dirt around the earth. I took a globe and I would mark out our progression as we worked.” Hoffman said most mining sites range in size from 40-acres to 60-acres, and in Wisconsin, where over $1 billion in investment has been put into the frack sand mining industry, a typical mining site can range from 600,000 tons of production to three million. A mine will be developed using a block method, a process that opens an area, mines out the desired product, and then reclaims that land as additional mining on the property is performed.

Hoffman and his team don’t want to be in the sand supply business, he added, but rather in the service business, helping companies manage or develop a site. “We are blessed that we are in the right geologic area here,” he said, a place that has a high volume of natural sand deposits.