METS – Open Innovation Calls in South America

The mining industry has traditionally been quite conservative when introducing technology. In some ways, it is understandable. Miners have large assets, with very long lives, that operate 24 hours a day, 7 days a week. A disruption in one area can quickly upset other processes along the production chain. The result is that a disruption can slow or completely stop production which has significant consequences for an operation that already has tight margins.

In the past, introducing technology and new ways of doing things was a risk that many mining companies were cautious about.  Fast forward to today, the mining industry has completely changed this mind set. The industry is transforming at a pace not seen before. The shift has come at a time when miners are facing declining ore grades, more complex geologies, shrinking margins, and increased stakeholder expectations. Technology is seen as the key for helping companies to overcome challenges and increase productivity.

Supplier Challenges

Although mining companies are more open to innovation these days, there is still challenges for technology and service providers who are introducing new solutions. One of the challenges for providers is knowing how to navigate large companies that have complex operating structures, many different stakeholders, and operations that are spread out across the globe. There is many examples of providers who have ultimately failed because they have been unable to gain traction with miners even though they have a good solution.

Miners have responded by being more open about the problems they are trying to solve. They have done this by using open innovation calls to solve specific operational problems. Some miners have gone even further and created special investment vehicles with the goal of investing in early-stage startups.

The result has been that mining companies have been able to engage with the supplier ecosystem much better than in the past. Procurement teams have also been much more open to technology companies who are traditionally not mining focused.  Even with these changes, it is still difficult for suppliers to know how or who to introduce new solution to. It is even more difficult to have visibility about what is happening at an operation on the other side of the world.

Luckily, when it comes to Latin America, there are several resources that will hopefully help suppliers with more visibility of opportunities. 

Codelco – Open Innovation

Codelco has recently presented its new open innovation platform, OpenCodelco. This new initiative will operate as a single entrance, permanently open to receive proposals from providers.

Companies will be able to fill out a form presenting their proposals and initiatives. These will then be analyzed by the Codelco innovation team. If an opportunity is identified, the company will be contacted so that he can present it to the operational area that it relates to or is interested in the subject. Then, if both parties declare interest in moving forward, Codelco will request a project proposal.

The goal of the open innovation platform is solving some issues that suppliers currently face. The first is giving suppliers a place where they can initially present their solutions. The second is understanding the criteria of working with Codelco. The third is introducing the supplier to the specific people who need the solution or can promote the solution internally should they find it useful.

Open Innovation – South America

Below is a small list of some of the orginizations that regularly publish open innovation calls from Chilean miners. These are good resources for companies that want to keep an eye on the Latin American market for opportunties. They do not substitute regular business development activities but can be helpful to companies who from time to time will see an area they can add value to. 

Conclusion

Open innovations calls and platforms like the one that Codelco has recently announced are only starting points. Mining companies still need to do a better job of communicating their problems, providing guidance to supplier on how to best work with them, and being more flexible. Although they are trying to improve, mining companies are still complex to navigate, have outdated ideas of intellectual property, and heavy administration burdens for suppliers.    

From a mining suppliers’ perspective, even with platforms and challenges that give companies an opportunity to present their solutions, it is a not a substitute for regular business development. This means going to site, speaking with operational staff about the problems they are facing, and making contacts at all levels of the mining organization. In addition, suppliers need to get better at communicating the benefits of their solutions and understanding how their solutions fit into the overall production chain.

Ax Legal is an advisory firm that works with foreign companies in Latin America. Our team of legal and commercial advisors have a distinguished track record of helping foreign technology and services companies to grow and operate in Latin America. Over the years, we have worked with starts up, mid-size businesses, and publicly listed companies. The one common factor that connects our clients is that they are leaders in their field, providing innovative technologies and services to the industrial sectors.

To better understand how we can support you in the Region, please contact Cody Mcfarlane at cmm@ax.legal