NEW CHALLENGES AND OPPORTUNITIES OF THE NORTH OF CHILE

Plenary:Developing regional clusters that are innovative, inclusive and sustainable

Conference OECD Mining Regions. 2017, Antofagasta, Chile.

Eduardo Bitran C.CORFO executive vice-president

Chilean Economic Development Agency

Creation of a shared vision Industry-Academy-State on opportunities

and obstacles in sectors with high potential.

The construction and implementation of a roadmap defines and

implements activities to close the identified gaps.

Construction of Roadmaps for Smart Specialization Programs

CORFO ASSUMES NEW ROLPUBLIC-PRIVATE ALLIANCES

In sectors and / or technology platforms with a strategic focus, around shared visions of the future, trying to remove barriers to sophistication and productive diversification

GLOBAL TRENDS: OPPORTUNITIES & CHALLENGES

CLIMATE CHANGE, CLEAN ENERGIES, ELECTROMOVILITY

DIGITAL REVOLUTION & INDUSTRY 4.0

HEALTHY AND FUNCTIONAL FOODS,

WELL-BEING AND SUSTAINABLE PRODUCTION

Growth in global demand for NATURE TOURISM, longer life after

retirement

Logistic

Solar Industry / Water

Digital Transformation & Smart Manufacturing

Biotechnology for the Industry & Health

MININGCLUSTER

SUSTAINABLE SPECIAL

INTEREST TOURISM

HEALTHY AND SPECIAL

FOOD

CREATIVE INDUSTRIES

SUSTAINABLE AQUACULTURE AND FISHING

HEALTH TECHNOLOGY

SERVICES

CONSTRUCTIONAND TIMBER

SECTOR

Startegic Sectors

Platforms

EFFORTS FOCUSED ON DYNAMIC COMPARATIVE ADVANTAGES IN KEY SECTORS WITH PUBLIC-PRIVATE COLLABORATION

THE WORLD'S HIGHEST SOLAR

RADIATION IT IS IN THE NORTH OF CHILE

Opportunities for Chile

Global trend: exponential growth of electromobilityand hydrogen-based economy

At 2030 there will be 30 millions of electrical vehicles.

It will need a production of additional 3 millions tonf low emission Copper (15% of world Production).

Atacama Desert singularities

Highest solar potential>3.500 kWh/m2

~ 4.000 sun hours/year

Biggest metallic mining district in the world

Strong position in non metallic mining -1rst in lithium production and natural nitrates (energy storage)

A UNIQUE OPPORTUNITY: CLEAN MINING AND DOWN STREAM MANUFACTURING

BASED ON SOLAR ENERGY POTENTIAL

A key territory for the Chilean productive transformation

At 2025 Chile

has a diversified

industry.

LCOE

solar energy

lower in the

world

Human Capital

Industrial Development

Infrastructure & scientific /

technological equipment

CENTRAL AXES

CR

OS

S A

XE

S

Standards

Hig

h R

ad

iatio

n

Inte

gra

tio

na

nd

de

live

ry

Se

lf-S

up

ply

STRATEGIC

AXES

SOLAR ENERGY PROGRAM 2016-2025

INDUSTRIAL DEVELOPMENTTECHNOLOGICAL DEVELOPMENT REINFORCING QUALITY INFRACTUCTURE

AND HUMAN CAPITAL FOR INDUSTRY

• Open innovation platform • Innovation challenges financing• High-tech investment attraction

program

• Photovoltaic systems for desert application

• Solar mining and metallurgy program

• CSP and Thermal energy storage system program

• Solar desalination• Solar fuels program• Advanced human capital program

• Climate characterization• Metrological network• Standards• Conformity assessment schemes• Certification of labor competencies

program

Solar Technological District

Solar Corridor “Cuenca del Salado”

This Roadmap seeks to take advantage of the Atacama Desert’s unique features to develop a national solar power industry with technological capabilities and export-oriented. To this end, an initial portfolio of 50 initiatives was identified,

with a total budget of US$800 million.

SOLAR ENERGY PROGRAM 2016-2025

THE LARGEST SOLAR METALLIC MINING

DISTRICT IN THE WORLD IS IN THE

NORTH OF CHILE

• Areas in the heart of themining process, are themost crucial technological challengesfor the development of the industry.

• Dimensions, withoutbeing exclusive of themining process, determine the ability of the industry to carry outits development plan

PULLER CORES

ENABLERS CORES

TAILIN

GS

SMELTER

& R

EFINER

Y

MIN

ING

OP

ERA

TION

&

PLA

NN

ING

MIN

ERA

L CO

NC

ENTR

ATIO

N

HY

DR

OM

ETALLU

RG

Y

CO

PP

ER N

EW U

SES

EXP

LOR

ATIO

N

HUMAN CAPITAL

SUPPLIERS & INNOVATIONS

SMART MINING

SOLAR ENERGY

GOALS for 2035

Production of 8.5 million tons

80% of production in the first quartiles of industry

costs globally

250 world-class suppliers

USD 4 billion in exports of goods and services

1 million tons of Green Copper

ALTA LEY - MINING PROGRAMProgram Strategy

Unique Challenges in Remote Underground / Autonomous Mining

• Predictive maintenance

• New generation of ore concentration technologies

• Sustainable refinery and smelter production

• Technologies to increase water efficiency and energy use

• Advanced hydrometallurgy

• Sustainable processes in water managementRaising technology services export from

US$ 500 m to US$ 4 billions

Mayor increase in productivity and sustainability

APPLIED R&D OPPORTUNITIES AND DEVELOPMENT OF INNOVATIVE MINING SUPPLIERS

SMART MININGM2M Communication

Big

Dat

a

Data Analytics & mathematical modelling

SensoringAutomationR

ob

oti

cs

MechatronicReal time process control

PLATFORMS FOR KEY CLUSTER SUPPLIER DEVELOPMENT

MINING Open Innovation

Platform

Technology

Mapping

Ecosystem

Linkage

Challenges

Characterization

& Release

Portfolio

Management

Scale-up

Strategies

Financing

Strategies

Technology

Management

Business

Management

MiningProductivity

SuppliersDevelopment

Suppliers

Startups

Universities

& Research

Centers

Government

Financing

Mining

Companies

Stakeholders

Financial

Impact* Aug 2017 Next 18 months

*8 Months since starting Open Innovation Program

EXPANDE Current Contracts Potential Contracts

Projects Portfolio USD 4,272 M USD 25,459 M

Government Grants up to

August 2017400K 1.300M

Return over Government

Grants10.7

Potential Return over

Government Grants19.6

SOLAR ENERGY, SUSTAINABILITY AND MINING

Currently only 5% of H2

production is based on

electrolysis.

The CAPEX for

electrolyzes is foreseen

to decrease to USD

400/kW by 2020.

Germany, Japan and

other countries are

looking for overseas

supply of zero-emission

hydrogen.

By 2035 there will be an annual

production of 20-40 millions of

electrical vehicles.

Demand increase of lithium of

180 thousand tons and US

$1000 million in sales to 500

thousand tons and US $6 billion

in global sales to 2025.

Chile with 52% of the world's

Lithium reserves could supply

50% of the market. With exports

of US $3 billion of lithium and

US $2 billion of manufacturing

products of lithium and rare

metals.

Last power purchase

biding process in Chile (no

subsidies):

PV ~30 USD/MWh;

CSP ~63 USD/MWh

Technology development

(PV for high radiation and

lithium/molten salts for

CSP storage) could reduce

the combined LCOE

PV/CSP to 50 USD/MWh

in 2025 and 40 USD/MWh

in 2035.

Electro mobility will

require additional 2 - 4

millions tons of low

emission copper

(10-20% of world

production).

Chile, is in the best

position in the world to

supply the global green

copper market and

develop value-added

green products from

copper and other metals.

Green CopperHydrogenElectro MobilitySolar Energy

THE LITHIUM KEY RESOURCE

Ele

ctro

mo

bili

tyva

lue

chai

nCALL FOR INVESTMENT IN LITHIUM ADDED VALUE PRODUCTS

OPPORTUNITY FOR THE DEVELOPMENT OF VALUE-ADDED PRODUCTS IN LITHIUM IN CHILE

NATIONAL STRATEGY FOR LITHIUM DEVELOPMENT

The Chilean government, through Corfo, owns the lithium resources in the Atacama salt flat. Albermarle and SQM are currently exploiting the mineral.

Chile owns more than 50% of the world reserves.

Chile is expanding the production capacity through a recently signed agreement with Albermarle (ex Rockwood Lithium).Chile has the lowest production cost (evaporation of brines vs ore).

With 70% of extraction efficiency, Chile could produce more than 500.000 tons/year – A third of the world production World Lithium Reserves

Source: STATISTA 2016

Cobalt is critical for the FutureROSKILL'S FORECAST FOR CHANGES IN THE CATHODS CHEMISTRY

(% OF PASSENGER VEHICLES)

NIMH: Nickel / Metal Hydride

LFP: Lithium / Iron / Phosphate

NMC: Nickel / Manganese / Cobalt (Low in Ni)

NMC: Nickel / Manganese / Cobalt (Medium in Ni)

NMC: Nickel / Manganese / Cobalt (High in Ni)

LMO: Lithium / Manganese / Oxide

NCA: Nickel / Cobalt / Aluminum

Source: Roskill

Source: Roskill

ALTERNATIVE CATHOD TECHNOLOGYADDED VALUE: Electromobility Chain

Consumer electronics, aeronautic industry and electro mobility require minerals that are very scarce in earth (Ga, Re, Ge, Co, rare earths, etc.)

Tailings represent an opportunity:• 2 R&D Consortiums supported by Corfo are developing strategies

and technologies for recovering value from tailings

• In Chile, there are up to 400 tailings deposits (closed and operating) ~ 1 billion tons are produced annually

• A preliminary analysis shows 20% of them could be re-processed to extract remanent Copper and Molybdenum, as well as high value minerals.

SCARCE AND HIGH VALUE MINERALSA secondary mining industry from Tailings

Atacama Region - Huasco - FreirinaLatitud: -28.7 Longitud: -71.2333

Chile exploited Cobalt until 1944. The maximum production was 25.000 ton of fine Cobalt in 1903.

Cobalt exploitation is being considered again.

It could be found in Iron Ore exploitation in Piritous formation. Also in tailing of copper exploitation.

The preliminary indication is that Chile could become a producer of Cobalt as a by product of copper Iron ore and rare metals exploitation.

LA COBALTERA

THE NEW HYDROGEN BASED ECONOMY

Mining Fuel Substitution

2 million m3 Diesel/ year50% Hydrogen substitution

50,000 Nm3H2/h

• 900MW PV

• 25 Large H2 electrolysis plants (750 MMUSD)

By 2025, cost of H2 producedusing solar PV (LCOE 25 USD/MWh,

33% plant factor) might be competitive compared to diesel

Range: 2,2 – 2,6 USD/kgH2

HYDROGEN OPPORTUNITIES

CHILE HAS CONDITIONS TO BECOME A PRIVILEGED SITE FOR ZERO-EMISSION HYDROGEN PRODUCTION.

H2 production based on solar energy, with PV/CSP at average price of:

• USD 50/MWh by 2025

• USD 40/MWh by 2035

Local consumption for mining, maritime and public transport

In the future, to supply the international demand (e.g. Japan)

HYDROGEN STRATEGY 2025

The opportunities of the

ATACAMA DESERT

Some outstanding projects ...

MEGA SOLAR POWER STATION (750 MW- 1GW)

PUBLIC LAND (NATIONAL ASSETS MINISTRY)

SUPPLY QUALITY (~ 24/7)

COMPETITIVE PRICES

TECHNOLOGY MIX, ECONOMIES OF SCALE, DEVELOPMENT OF LOCAL SUPPLIERS

ECO INDUSTRIAL PARK

EMISSIONS

REDUCTION 1,000,000TON CO2 EQ.

(REF. COAL)

600,000TON CO2 EQ.

(REF. NG)

4,000 MMUSDTOTAL

INVESTMENT

SOLAR TECHNOLOGY DISTRICT

Solar metallurgy Low emission

process technologies

Use of clean fuels in mining

CTS CAM

PV for high radiation CSP and Storage

Systems Solar Fuels (H2) Desalination

CTM

Advanced materials and added value copper products

Added value lithium products

Processing and purification of scarce minerals

SOLAR MINING

NATIONAL

TECHNOLOGY

INSTITUTE

Solar Technology Center Advanced MaterialsMining Technology Center

• R&D&i: strategic lines with technologytransfer models (sale or licensing, spin offs)

• Piloting and Technology validationservices

• Broad technological diffusion and extensionism

• Specialized Technological Services

• Training of advanced human capital – inalliance with Universities

• Contract Research and TechnologicalDevelopment contracts with Industry

ROLES AND SERVICES

SOLAR MINING NATIONAL TECHNOLOGY INSTITUTECurrently under creation

To adapt and/or develop solar photovoltaic power technologies that respond better to the uniqueconditions in desert and high-radiation regions in terms of their durability and expectedperformance that lowers the leveled cost of energy to a target of US$25/MWh by 2025 and placingspecial emphasis on the development and strengthening of local suppliers to create a sophisticatedindustrial sector of goods and services for the local and international market.

Corfo co-finance: USD 12 millon (up to 50%)

Source: Estudio Caracterización del Espectro Solar – Programa Solar

TECHNOLOGY CONSORTIUM PV TECHNOLOGIES ADAPTED TO HIGH RADIATION IN DESERT CLIMATES

WE ARE CURRENTLY IN THE BEST PLACE TO BE A LEADER IN THE DEVELOPMENT AND DEPLOYMENT OF SOLAR ENERGY TECHNOLOGIES

TO SUPPORT OUR COPPER, LITHIUM AND FUEL INDUSTRIES (H2, NH3, ETC).

The Economist The Washington Post Financial Times

POSITIONING INTERNATIONALLY

THANK YOU

@Corfo