The new barrier to entry is the environmental license to operate. Okay, that seems like a simple statement, but whenever I look at industries that interest me–and I do not mean mines, but actual factories–the single largest barrier to entry seems to be the license to build the plant. This, coupled with at “not in [...]
Entries Tagged as ‘Porter's Five Forces’
May 11, 2008
Suppliers: They keep the lights on (Porter’s Five Forces)
Suppliers have lots of power in most industries, and the mineral industry is no exception. To make a mine work, you need a few key resources beyond an ore body, and to get these you will need to work with suppliers. You need the logistical ability to get the ore to market, the power/energy to [...]
May 8, 2008
Even the U.S. Treasury is thrifting copper, nickel, and zinc
Associated Press: House passes bill to make coin-making cheaper
I recently discussed threats from substitution, and now the U.S. Congress is getting into the game. Congress just passed a bill to make the penny–a nice copper-looking coin–into a copper-plated steel coin, and to make the nickel also use steel for its base metal. This is going [...]
May 2, 2008
The threat of substitute products (Porter’s Five Forces)
One would not assume that you can substitute most minerals from a value perspective, and you would be mostly right. The issue is “thrifting,” where you reduce your use, and I can start by looking at the copper market. On the side, I build stuff (okay, I tend not to do all the nailing, but [...]
April 28, 2008
Porter’s Five Forces
It is hard to think about the commodities business rationally, yet you have to do it if you are going to understand which businesses you like and which you do not like. To make these decisions, the first issue is figuring out a system or a structure in which to look at the different markets. [...]
