VENTURE CAPITAL IN THE COPPER MARKET & INDUSTRY DEVELOPMENT Codelco New uses of copper Investment Fund Thomas Keller L. CEO April 11 th, 2014 Copyrights 2011 CODELCO-CHILE. Todos los Derechos Reservados. Copyrights 2011 by CODELCO-CHILE. All Rights Copyrights 2010 by CODELCO-CHILE. All Rights Reserved. Reserved. 1
Sustainability of the copper industry The main drivers of the copper industry must address: Future utilization of copper Environmental sustainability Improve competetiveness of the copper mining industry Market Development New uses of copper Market access Social impact Mining Industry Development Productivity Energy & Water access Health, environment & communities Sustainability
Innovation to address the industry s challenges Innovations are seen as initiatives with low added value Short-term, price driven strategy makes R&D difficult Scarce financing and risk capital for the mining suppliers sector Poor understanding of multiplier effect Poor collaboration between mining companies Poor connection between research centers and the mining industry The importance of innovation New solutions to existing problems Capture of new market opportunities Value creation Industry leadership
Venture capital to boost innovation SUPPORTING AND ACCELERATING STARTUPS FOCUS ON FAST GROWTH BUSINESSES BEST PRACTICES IN CORPORATE GOVERNANCE BEST PRACTICES IN INVESTMENT MANAGEMENT CONNECTIONS TO CLIENTS, PARTNERS, OTHER INVESTORS, ETC. SUPPORT FOR INTERNATIONAL DEVELOPMENT
Startups add value: Technology entrepreneurship is an asset Creativity / new ideas Risk taking Solutions from other industries, markets, environments STARTUPS Flexibility / agile Venture capital ADDED VALUE SOLUTIONS Copper market & industry
Why innovate in Chile s mining industry? We have a world class mining industry Capital intensive Technology intensive Water & energy intensive Chile is the world s leader in copper mining Largest mining operations The most advanced technologies Chile has a third of the world s copper reserves Copper mining is the most important industry in the country Codelco, a fully state-owned company, is the world s largest copper producer
Codelco s approach to market development Codelco, state-owned company, as the world s largest copper producer, is fully committed to copper industry s sustainability. Founder, main member and active participant. Since 1989. Only mining company to have a new uses of copper (technologies and products) developer subsidiary. Since 2008. Programa de Proveedores de Clase Mundial Mining industry technological initiatives. Codelco is now promoting an innovative business model to accelerate the advancement of new ventures for new uses for copper
An opportunity to create a technology driven ecosystem PLATFORM TO DEVELOP A GLOBAL INNOVATION LEADERSHIP BOOSTING A NEW GENERATION OF BUSINESSES AROUND THE COPPER MARKET AND INDUSTRY CONTRIBUTING TO THE ECONOMIC GROWTH OF THE WHOLE COUNTRY Chile as: Leader in copper added value technologies and products Mining technological hub Pioneer in savings in energy and water usage in mining
New Uses of Copper VC Fund 1 ST VENTURE CAPITAL FUND FOCUSED ON THE MINING INDUSTRY S COMPLETE VALUE CHAIN: Enabling processes and technologies Mining process Markets and Stakeholders Energy & Water access Key supplies Occupational safety Mining processes Emissions treatment New uses of copper Life quality Sustainability
Funds investment strategy: target companies COPPER ADDED VALUE TECHNOLOGIES & PRODUCTS: New uses for copper and for other by-products of the copper industry (downstream). Clothing Industry Health Industry Medical Heavy Duty Fashion Food Industry Medical Devices Hospital Infrastructure Other Industries Tissue Regeneration Export Logistics Aquaculture Solar Power Heating ventilation and air conditioning Equestrian Water Harvesting Melamine and Touch Surfaces
Funds investment strategy: target companies MINING OPERATIONS TO IMPROVE COMPETITIVENESS: Solutions improving upstream processes competitiveness & sustainability Labor Safety Electric Transmission On-condition Monitoring Flotation Process Lixiviation Process Electro-winning Process
Funds investment strategy: target companies KEY SUPPLIES / SERVICES TO MINING OPERATIONS Clean energy / fuels Renewable Heat Power Sustainable Water Reagents for Mining Processes Tires Recycling Tailings Recovery
Proposed fund structure INVESTORS AFP s Family Offices Investment Committee VENTURE CAPITAL FUND INNOVATIVE COMPANIES Target size: US$ 80 M Investments: Codelco: US$ 5 M CAF: US$ 5 M BID: US$ 5 M Others & AFP s: US$ 17 M CORFO: US$ 48 M (credit l) Start: 2014 Q3 Investment period: 10 years (+2) Investment per venture: Minimum: US$ 0.5 M Maximum: US$ 5 M Investment criteria: 50% new uses of copper 50% mining processes, energy and water access
Good deal flow Codelco-INCuBA s portfolio & deal flow ICA s world portfolio & deal flow Programa de Proveedores de Clase Mundial Local & international industry suppliers Universities & research labs Business incubators & entrepreneurs assoc. Chilean innovation programs
International support: Participation of two multilateral banks: Institutions that promote the development and economic growth of the region through investment and value generation Promoters of sustainable development in South America Expertise in investment funds and venture capital International networking and outreach
Current status Committed investors Engaging investors US$ 16 M US$ 9 M CORFO US$ 25 M Investment Fund Initial Opening US$ 50 M
VENTURE CAPITAL IN THE COPPER MARKET & INDUSTRY DEVELOPMENT Codelco New uses of copper Investment Fund Thomas Keller L. CEO April 11 th, 2014 Copyrights 2011 CODELCO-CHILE. Todos los Derechos Reservados. Copyrights 2011 by CODELCO-CHILE. All Rights Copyrights 2010 by CODELCO-CHILE. All Rights Reserved. Reserved. 17