• Alumni

Activity Feed

On December 1, 2017, Tomas commented on Steel Tariffs: Making America Competitive Again? :

This is a most interesting case on an industry which is extremely impacted by proteccionism and other distorting measures. While BHP can follow a strategy to try to lobby against certain measures, the ultimate output is very difficult to change or even forecast (especially as high profile economic and political actors might be lobbying for the opposite measures).

Operating in China has inherently created exposure for this kinds of risk, which is exacerbated by the fact that it represents a relevant 41% share of BHP’s business. There are certain measures which could help the company mitigate this risk. For example, the company could take a position in alternative metallic sources in the US or other positions in financial futures which could help compensate the risk of this kind of regulations appearing. Also, the company would be wise to analyze the impact of this measures for the China operation, drafting potential plans to suspend or reduce production and/or find alternative customers who could purchase excess iron ore volume.

On December 1, 2017, Tomas commented on Walmart: From Supply Chain to Blockchain :

Very interesting read on an additional application of blockchain.

Regarding risk of information leaks, I agree that this is a very material, and probably unavoidable, risk. For an open ledger approach, competitors could easily access the complete dataset from friendly shared suppliers. Even with a closed ledger approach, as Jim Holden mentioned, access can be achieved by unwanted third parties.

In terms of burden, I believe Walmart can leverage its powerful position in the chain to establish this new technology. However, It should consider the cost impact, which could be high, especially for smaller scale suppliers. Therefore, I would suggest a gradual approach, starting by implementing the technology for those suppliers which:
1. Can adopt the technology more easily (e.g. large scale, sophisticated suppliers), and
2. Will have a stronger impact from improved traceability (e.g. perishable goods)

Very interesting read, I’d like to comment on your questions:

3-D printing might not be practical to apply to all product lines within the industry. However, by disrupting a few critical product lines, this can prove a relevant advantage. Especially for fast-paced drilling operations, like unconventionals, operators will benefit from avoiding drilling stops due to lack of equipment.

Of course there are challenges ahead, as you mentioned, regarding printed materials quality control, as well as limited cash availability to invest in this kind of technologies. However, even if 3D printing develops slowly and in for a very limited number of uses, this would be a very attractive opportunity to reduce drilling time (and therefore cost), an imperative requirement for Oil & Gas companies in this hard days.

On December 1, 2017, Tomas commented on The Mining Industry in Chile and its Solar Bet :

Great read!

I am really attracted by the idea than the company can actually make an opportunity out of the increasing regulation. However, for the time being, I find unlikely the idea that copper consumers will assume a higher purchase cost to support for cleaner energy.

Given the existing renewable potential , I can envision a scenario where Antofagasta Minerals will support the development of solar developments in northern Chile to supply (partially) their energy demand. This could be executed in the form of financial stake in this hypothetical project, or through long-term offtake agreements (both of which will facilitate project finance).

However, I would still like to reflect on the fact that this might be economically prohibitive. Despite the record-low renewable energy costs, access to cheap LPG could be a lower-cost energy for power generation. Similarly, a boost in Argentina’s shale gas production could generate excess gas which could be imported by Chile (with existing infrastructure in place), thus generating energy with a lower total cost. Ultimately, the outcome will depend on the extent to which renewable power generation projects in Chile can remain “record low” when exposed to potentially cheap fossil fuel sources.

On December 1, 2017, Tomas commented on Dark days ahead — SolarCity vs Protectionism :

John, Phil, thank you for your insight in such an interesting topic!

While an interim additional location might seem unlikely, given the upcoming capacity in Buffalo, I think there is still merit for developing this supply chain. On the one hand, this will provide a better diversified and more robust supply chain. Moreover, while the Gigafactory2 will supply relevant capacity, future demand growth might still require for additional sources. On the other hand, international production sites can benefit from lower production costs.

Great Read!

I would also like to comment on the impact of flare restrictions being defined with a flexible approach. If different operators can trade their allowances, this could lead to better efficiency for responsive actions. For example, wells in remote areas would be encouraged to assume all the flaring, while “buying” the allowances from wells with more relevant gas volumes and closer to trunk networks which could invest on connecting to the network.

Moreover, I am very interested on how the business for equipment rental will develop as the enforcement becomes more strict. There is a very interesting opportunity to bring up additional gas processing capacity.