Context of Current and Future Mining

The mining industry is currently facing a number of significant challenges and unprecedented opportunities. Global demand for critical minerals—essential for the transition to clean and sustainable energy—is growing rapidly. Demand for copper and nickel is expected to increase by 50-70% by 2030, while demand for cobalt and neodymium could increase by 150%.

In parallel, the industry currently faces important challenges:

• Lower grades: The decrease in ore quality requires processing greater volumes of material to obtain the same amount of ore, thus increasing operational costs and efforts.
• Workers who favor urban areas: Qualified workers´ lack of interest in working in remote locations hinders the efficiency and operational continuity of mines.
• Greener mining: The industry needs to reduce its environmental impact and comply with stricter regulations on emissions and the use of natural resources​.

The Role of Latin America

Latin America stands out not only for its wealth in minerals, but also for its entrepreneurial talent. The region is home to vast reserves of essential minerals, positioning it as a key player in the global mining industry. Chile, Peru and Mexico are leaders in copper production, while Chile and Argentina stand out in lithium production.

In addition, Brazil has important reserves of graphite, nickel and rare earths. This abundance of resources, combined with an emerging ecosystem of mining technology startups, offers a unique opportunity to capitalize on innovation and technological development.

The Need for Technology in Mining

To address these challenges and seize opportunities, technological innovation has become an imperative in the industry. While in the past mining operations were reluctant to try new technologies, they have now changed their mindset and are much more willing to embrace innovations. Technology will be the catalyst that will allow the mining industry to overcome current challenges and meet the growing demand for critical minerals. The adoption of digital technologies, automation, artificial intelligence and the Internet of Things (IoT) can significantly improve operational efficiency, increase production capacity, and reduce costs.

Lack of Financing for Technological Development in Mining

Despite the importance of innovation, technological development in mining faces a serious lack of financing. Less than 2% of total global venture capital (VC) investment goes to mining technology startups, and in Chile, where mining represents more than 13% of GDP, this figure is even lower. This funding gap limits the growth of startups that could offer high-impact solutions for mining companies.

The Contribution of the Alza Mining Tech Fund

The Alza Mining Tech Fund has been created to fill this gap, offering financial and strategic support to mining technology startups in Latin America. The fund focuses on companies that have already implemented their products in major operations and demonstrated their scalability potential. The fund’s objective is to position itself as strategic partners in the companies where it invests, not only providing capital, but also supporting business development and facilitating the entry of these companies into broader markets.

Currently, the fund is operational (with more than 35 investors) and in the process of making its first two investments. Additionally, we have set a goal of making two additional investments this year. The Alza Mining Tech Fund aims to exceed $20 million in assets under management and invest in 8 to 12 companies over the next three years. We are committed to promoting innovation in mining and contributing to the creation of a more dynamic and sustainable ecosystem in the mining industry.

Conclusion

Mining faces significant challenges, but also presents extraordinary opportunities. With the right support, mining technology startups can play a crucial role in transforming the industry. Incorporating advanced technologies will not only improve operational efficiency but also ensure a sustainable supply of critical minerals needed for the global energy future. As we move forward, it is essential that the mining industry adopts an innovative mindset, supports technological development, and works collaboratively with all stakeholders to overcome challenges and capitalize on opportunities.

The Alza Mining Tech Fund is prepared to be a key player in this change, supporting the most promising startups and facilitating their growth and success in the market.

Andrés Rodríguez – Portfolio Manager – Mining Tech

• Translated to English by Sadie Cheston Harris.