Open Innovationin Mining

Fundación ChileJune 2018, Adelaide

Who we are

Funded in 1976 by

the State of Chile

and ITT Corp.

BHP joins in 2005 Foster development

through innovation

Do Tank

(+70 spin-offs)

Public Mission

Private

Management

Model

+160

Organization

International

Network

Ventura Capital

and Open

Innovation

pioneers

We are small in

everything, except

mining

Mobilize talent, capital and

entrepreneurship energy to

mining

Generate “real options”

thay may develop in new

sectos

Why Mining?

In the core of our mission

¿Why Open

Innovation?

Mining companies

are not in the

technological

development

business

Mining companies are

equipped, prepared

and mandated to

absorb their business

risks

The risk-return

profile of

technology

development is

tough to digest for

mining companies

Different agents

with different risk-

return appettites

Information about

their problems

signaling

Transparent and fast

selection processes

“Bankable”

contracts

Clear rules for

sharing resources

($, time, attention)

and results

(information,

knowledge and $)

¿Why Open

Innovation?

Mining

development

Mets

development

¿Why Open

Innovation?

Third role of mining(not only of mining companies)

The temptation of closed innovation(in a VUCA Environment)

•Difficult to fight for attention

•How to distinguish a grass sprout from a

sequoia?

•Very high opportunity costs in managing

early stage innovation

•Very high transaction costs and the

beginning of the road

The challenge

of innovation

in the mining

sector

Tour Package

You know where you are going and the itinerary

You pay the full price in advance

• No flexibility

• No optionality

Backpacking

• You know were your heading and an idea of itinerary

• You change your plan as you learn /experience

• You usually do not end where you where heading

• Flexibility

• Optionality

• You may cut it short or extend it

What’s your choice?

•Transaction Costs

• Information asymmetries

•Access failures

•Power asymmetries

•Coordination failures

•Need of public goods

A broker is needed:

• Independent

•Understands public, academic

and private world

•Operation capability

•Strong brand to sustain tough

conversations

•Strong governance

It does not happen spontaneously

Information &Signaling

Coordination

Legitimacy

Three fronts of action

Mining Open Innovation Platforms

FCH

Suppliers

development

2017-2019

Digitalization – open

the space of new

players

2017-2021

Legitimize Mining

through transparent

tailings monitoring

2016 - 2021

Prepare workers

for the future of

mining

2017-2019

Expande

Fostering

Open

Innovation

Leverage the challenges

of the mining industry to

develop an knowledge

intensive industry of

technological suppliers

Demand pull

is key

Fuente: Cochilco 2018

Chilean Copper Production

70%

World Copper Production

Copper Exports

20% 25Bn

Public Role key…

Induce connections and collaboration

Offer

Support Scaling Investment & Financing

Mining

Companies

Large

Suppliers

SME’s

Large Suppliers

Start-Ups

Accelerators

Research Centers

International Network

Operational Challenges

Validated Technologies& Development

Scouting

Innovative Technologies

Demand

Located at the Intersection of

Productivity & Innovation

TECHNOLOGY MANAGEMENT

BUSINESS MANAGEMENT

Supplier

Development

Mining

Productivity

Identification, Management and promotion

of challenges

Technology Transfer

Technology Mapping

Investment & Financing

Scale-up

Portfolio Management

Ecosystem Linkage

Connect!

UNIVERSITIES

FINANCING

MINING

COMPANIES

GOBERNMENT

SUPPLLIERS

Team - Team - TeamTechnical and Business Capabilities

EXPANDEDirector

• Technology & suppliers database

• Program monitoring and reportability

• Management and formulation of

agreements with stakeholders

• Other private – government linkage

• Development of studies (success

cases, methodologies, others)

Strategy &

Development

Director

Controlling

Managers3

• Technology mapping

• Technology scouting

• Support in characterization of challenges

• Identification of Technological Solutions

• Proposal technical evaluation

• Technical support to the portfolio management

• Technical guidance to suppliers and startups

Technology

Director

Technology

Managers9

• Portfolio management

• Investment & Financing strategies

• Support in the development of

Business model

• Support in scale up

• Support in intellectual property

strategies

• International alliances

Business

Director

Business

Managers2

2017 HighlightsFirst Year of Operations

TechnologiesMapped

600Operational Challenges

34RecommendedTechnologies

72RecommendedTechnologies

$7 MillPotential Contracts

$20 Mill

Innovation is a Global Game

No cooperation, no game

Thank you

Andrés Pesce

tw: @andrespesce10