Some firms aim to be the largest in their industry, but Black Hills Bentonite LLC has found success with a modest size, President Tom Thorson says. “We’ve been able to make decisions without having to go through a large company’s bureaucracy,” he says, adding that this allows it to efficiently “take advantage of situations.”
Based in Mills, Wyo., the company manufactures lignite products for drilling fluids companies and high-grade Wyoming bentonite, which has applications in well drilling and cat litter. In addition, it has a variety of environmental applications and foundry applications. Thorson’s father, Harry Thorson, co-founded the company in 1947.
Thorson had been a contract miner who recovered bentonite and brought it to processing plants. When the mines chose to not continue employing Thorson, he took his reserves and built his own bentonite plant.
Today, Tom Thorson says, Black Hills Bentonite has five bentonite plants and one lignite plant. In addition, the company employs approximately 100 and serves clients as far away as Japan.
Black Hills Bentonite has sold portions of ownership to its customers.
“It’s [unique] that we [can] divest part of our interest, but retain control,” Thorson says. The company wrote a partnership agreement that permitted it to control multiple aspects, including capital purchases and employees.
Thorson joined his father’s firm 50 years ago and enjoys leading its staff. “I have a lot of good people who work for me,” he says. “I like people to do everything they can through their own initiative.”
He nurtures this trait among his staff. “They take ownership over what they’re doing [when] their ideas are given a lot of credence,” he says. “They don’t [need] as much supervision that way.”
Thorson’s key associates in management include Vice President and CFO Larry Madsen. While Thorson oversees the outdoor operations, “[Madsen] is much closer to the office and execution of orders,” Thorson explains.
Upgrades and roadblocks
Black Hills Bentonite is evaluating its properties to find additional reserves, Thorson says. He notes that the plants do not have any value by themselves, other than salvage, as the equipment is specialized for bentonite processing. The company recently updated several of its locations.
“[We] put in some newer screening capabilities basically to update our granular capabilities,” he notes.
At its Worland, Wyo., plant, Black Hills Bentonite removed a battery of existing screens and replaced them with a single Megatex. The same was true of its Mills plant, and the Megatex has resulted in greater productivity.
Black Hills Bentonite also is coping with a challenge in its local environment. “We have a bird out here called a sage-grouse,” Thorson says. “The environmentalists have wanted to get the sage-grouse [recognized] as an endangered species.”
This means new permits are required for mining. “Certain areas have been declared core areas [for the sage-grouse and] carry with it an owner’s permitting requirements,” Thorson continues. “We don’t know what the basic end of it’s going to be.
“Certainly, we see it as being another roadblock,” Thorson says, noting that sage-grouse hunting is still allowed and its population has decreased. “[But] between the predators and the hunter, they come after the miners.”
A strong market
Looking forward, Thorson says Black Hills Bentonite sees the cat litter market as a strong sector in its future. The sector has recently grown at a rate of 6 percent annually.
“The clumping cat litter has been around for 20 years and it is well known by cat owners,” he says. “The split between clumping [which bentonite is used for] and non-clumping [which common clay is used for] has stabilized on about a 70:30 ratio.”
Thorson expects that to eventually reach a plateau and for it to grow only by 1 or 2 percent annually. “I don’t see it continuing to grow at 6 percent a year,” he says.
[Details correct at time of writing]