Chilean mining giant Codelco has entered a MOU with the Japanese Bank for International Cooperation (JBIC) to facilitate innovation in mining.

Codelco’s board of directors president Máximo Pacheco signed the agreement during his visit to Tokyo.

He stated that the agreement can support the company in acquiring capital goods and technology needed to innovate its production processes.

The agreement is also expected to help build cooperation between the two organisations in the development of critical minerals including copper, molybdenum and lithium while advancing goals of decarbonisation.

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By GlobalData

Through the cooperation, Codelco intends to strengthen business relations with several Japanese companies.

The aim is to create a framework to structure projects, which can help overcome issues related to the critical mineral supply chain.

Furthermore, the MOU seeks to support decarbonisation, which Codelco is committed to advancing through the use of hydrogen and ammonia, among others.

Pacheco said: “To carry out its business, Codelco needs many resources, including minerals, water, energy, and, of course, the talent of people; but financial resources are also essential.

“Therefore, it is extraordinarily important and valuable that JBIC, a state bank that promotes international cooperation, is interested in contributing to the financing of different innovation, sustainable development and other projects, because, in Japan, they understand the importance of critical minerals for the growth of the industrial activity of this country.”

In 2016, JBIC financed Codelco’s Molyb Plant in Mejillones, which produces molybdenum oxide. Some of the main clients of this plant are claimed to belong to the Japanese steel industry.

As part of its strategy to invest in critical minerals, last month Codelco reached a binding scheme implementation deed to acquire Australia-based Lithium Power International for $244m (A$385m).

The agreement is yet to secure court clearances and approvals from the Foreign Investment Review Board and shareholders.