Government expects Mining Industry itself triples expenditures in R&D in Chile
09-Jul-2012 Diario Financiero – News
Industrial property law and tax benefits regulations on R&D investment to boost growth
Government expects Mining Industry itself triples expenditures in R&D in Chile
The whole country investment in research and development represents 0.5% GDP. Purpose is mining industry to reach 1.5% in ten years
Mining is one of most important and influencing sectors in the country’s economy representing 15% of GDP and with investment prospects reaching US$91 thousand million for 2020. However it is also the sector with lowest resources addressed to research and development (R&D): Last R&D survey for Companies sector reports that about US$18 million were invested in R&D during 2010 which only represents 4.9% of total expenses the companies made during the same period only being exceeded by financial brokerage (6.4%), business-related activities (16.9%), and manufacture (52.6%). Besides, only 5% of projects using R&D tax benefit since 2008 are in this industry area, although resources assigned to the R&D projects totted up $1,415 million (23% of total). Pablo Wagner, Ministry Subsecretary, asserted that this situation should dramatically change during next decade as Mining Ministry is projecting that R&D item in mining industry reaches 1.5% of GDP for 2022 thus tripling the whole country investment (0.5%). “We are to double or triple this average as this is the industry with highest potential for new applications”, he added. In fact, Minister of Economy, Pablo Longueira, remarks that Chile should be a R&D reference point through large-size mining.
Biotechnological applications, new technologies, added value to lithium, and new products are expected to come to light during forthcoming years.
“US$ 50 million have been invested investigating antibacterial properties of copper, which if successful would make copper demand increase 15%. Investigations are lead by Codelco but we want to involve other companies as well and associate this matter to financial industry and risk investment funds to develop its applications”, Wagner says. The new tax incentive regulation applicable over research and development – to be enforced in September – will be fundamental as it allows for research to be made locally or abroad. Before this regulation application all research activities were only allowed if carried out in Chile in an authorized center, which was certainly a hurdle due to patents issues. Besides, the industrial property law to be passed also includes benefits for innovation.
Boost for expenditure will also be advanced by the World Class Mining Suppliers Development Program where 100 suppliers are participating in order to create innovative solutions. The program considers resources for US$100 million.
“Mining suppliers are invoicing more than US$12 thousand million and are important partners in developing applications, software, new technologies, and associated services. Innovation in mining sector may be as relevant as aeronautic industry in U.S.A.”, Wagner explains.
New projects
Mining companies are already preparing new projects. Patricio de Solminihac, SQM Assistant Manager, states US$5 million are assigned to in-house R&D and with the enforcement of new law “we will be increasing our investment”.
Christian Arentsen, Financial President for Teck, adds that the law “will promote the company to work together with suppliers. We will advance it for suppliers to join the new regulation. We have carried out R&D abroad only where appropriate laws exist. And that is the way Chile is taking”, he says.
