Codelco and Aurus throw line for $ 80 million for innovation in copper
The initiative, the first of its kind, already raised $ 16 million to invest in technology, value-added copper and energy
Codelco and Aurus just formed a pioneering venture capital fund worldwide for U.S. $ 80 million. This is Aurus Ventures III, where bet for innovations related to the copper industry and mining.
“It’s the only one in the world devoted to innovation in the use of copper, mining, water and energy. Chile is a laboratory to explore innovation and technology as there is elsewhere. We have all kinds of mining: continuous, underground, open pit, height, those using sea water, with huge needs, “says Victor Perez, Codelco Markets Planning and Commercial Development’s Manager, adding that the country is more 40% of the world supply of copper and has reserves for 60 years.
Victor Aguilera, managing director of the fund, matches indicating that mining is the major industry and has the challenge of betting on higher added value. “Is that moves more resources, more investment and is incorporating new technologies. It is our Silicon Valley, where we have Google or Facebook to get future, “he says. It is the first time that the world’s largest copper company ventures in venture capital to seek solutions-by-innovation to help their operations and industry. They already had a previous experience with INCuBA, where they invest in projects that increase the demand for copper and molybdenum, as EcoSea Farming (cages for salmon farming) or Kawell with Copper-Zinc horseshoes, but they needed to go further. The fund already has the first contributions: Codelco’s board approved resources by $ 5 million, the IDB Fomin (through the Multilateral Investment Fund, MIF) and the Development Bank of Latin America CAF, contributed with another $ 5 million each one and U.S. $ 1 million, the Aurus fund management. Thus, already have the first $ 16 million, $ 50 million they want to lift in a first step that concludes the first half of 2014. And in three years, projected to reach $ 80 proposed, including the CORFO’s application programs financing for investment funds.-
Conversations between the founders started in March 2013 and are already holding meetings to add investors and businesses.
In five years they plan to invest between $ 500,000 and $ 5 million in a portfolio of about 20 companies that meet certain requirements: copper products value added, mineral processing technologies and solutions for water, energy and sustainability .
International Impact
A fact not less important, they add, is that in the investment committee will be the International Copper Association (ICA), an organization that brings together the leading copper producers in the globe, allowing them greater access to projects and links with industry. His role with Codelco, will coordinate the establishment of pilot plants of supported firms to conduct tests on the copper company and mining. It faces a major milestone, explained Juan Carlos Delano, Aurus’s CEO, entity which has two venture funds in life sciences and technology. “It had never been in the industry for innovation to join in Chile as relevant industry players. Copper is the salary of the country, and we have to worry what will happen when it fails us. Saltpeter already failed “he says. For that reason, we must make room for innovation, says Victor Perez. For Patricio Diaz, IDB Fomin’ senior specialist, expectations are high: it is the first time that the company, which has supported more than 75 funds with over U.S. $ 323 million in the region, invest in one miner. “The alliance that has been formed does not happen every day. Investments will be seen by experts eyes in the international context, and it is expected to be an example for other industries actors relevant to Chile, such as forestry or aquaculture, “he says.
Threats: graphene and prices
The future fall of copper prices and the emergence of alternatives are provided in the concerns of the copper company, and that motivate it to streamline their processes. Perez said that in 2013 more than 600 thousand tons of copper were replaced by other materials. “There are a number of elements that do not warrant that our business will continue to be as profitable as in the past decade.” There appears graphene, which although is not considered a threat today, if potentially be in ten or 15 years, in areas such as conductivity, which represents 70% of the uses of copper. “When you see that there are consortia resources in the world with over U.S. $ 600 million to investigate its properties (graphene), we realize that we can potentially reach a substitution in which we must be prepared. We must find new uses for copper, streamline industry so we can defend the long-term business model, “he concludes.-
Source: Diario Financiero
