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Business Impact

Chile

Biotech innovations improve the country’s core industries of mining and salmon fishing.

  • by Gonzalo Argandoña
  • April 1, 2005

How can a small South American country compete economically with nations that invest 10 to 20 times as much in research and development? Chile’s strategy is to search for solutions for local needs that have not been addressed overseas. In particular, universities, private companies, and the government are working together to develop new biotech applications for industries vital to Chile’s economy.

Take mining. Chile is the world’s largest producer of copper, and copper accounts for about half of the country’s exports. But it is becoming more and more difficult to find high-grade deposits that are cheaply and easily mined. The government has therefore encouraged a partnership between the state-owned mining corporation Codelco and Japan’s Nippon Mining and Metals. A joint venture between these two organizations, called Biosigma, is developing the use of bacteria to extract copper from ore. This approach, known as biomining, is less expensive and less environmentally destructive than conventional processes. “We are one of the first companies totally specialized in the development and application of genomics for mining,” says Ricardo Badilla, CEO of the Santiago-based company.

For years, Chilean copper miners have used microbes to extract copper and other metals from low-grade mineral concentrates. The organism most commonly used is a bacterium called Acidithiobacillus ferrooxidans, which breaks the bonds between copper and sulfur. But researchers at Biosigma isolated a new set of bacteria that work better than this old standby. The company sequenced the bacteria’s genomes and applied for patents on some of the genes it found. (Biosigma has not disclosed the identity of the bacteria.) The process looks so promising that this year Biosigma will receive an additional $16 million from its parent companies to continue operations. Biosigma plans to field-test the new bacteria by year’s end.

This story is part of our April 2005 Issue
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“We hope to achieve a two- to threefold increase in Codelco copper reserves,” says Badilla. Such an expansion would have an impact throughout the global market, because Codelco owns about 20 percent of the world’s total copper reserves.

Another successful public-­private part­nership has delivered a biotech innovation that reaches not into the earth but into the water. The Chilean salmon industry—ranked second only to Norway’s—is threatened by a bacterium that grows within salmon liver cells, killing off massive numbers of fish in salmon farms and costing the industry as much as $150 million a year. ­Because this microbe—Piscirickettsia salmonis—does not cause nearly as much damage in the Northern Hemisphere, Chilean researchers and entrepreneurs had to find a way to combat it on their own.

The work was coördinated by Pablo Valenzuela, the senior research officer at the Millennium Institute of Fundamental and Applied Biology in Santiago. Valenzuela and his team sequenced all the salmon-killing microörganism’s genes, which allowed them to identify those genes responsible for the infection. Those genes were then used as the basis for a set of five vaccines, which were successfully tested at fish farms. The most effective vaccine was licensed to Novartis Animal Vaccines. Valen­zuela estimates the potential market for the vaccine at around $50 million per year, while annual research costs were only about $1 million.

The abyss that currently yawns between university researchers and the needs of industry is considered one of the main constraints on innovation in Chile, as well as in other Latin American nations. Valenzuela has proposed a strategy for encouraging biotech development in five industries that are of particular importance to Chile: mining, aquaculture, forestry, wine, and fruit. “The idea of this plan,” Valen­zuela explained in a recent paper, “is to position Chilean biotechnology under the umbrella of successful industries, similarly to what happened in the United States with health-related biotechnology organizations initially employed by pharmaceutical companies.”

Biotech could also aid Chile’s wine industry, which has experienced explosive growth in recent years. Nicolas Beltran, a researcher at the University of Chile in Santiago, has worked with winemakers to develop a system that uses a standard chemical sensor—an “electronic nose”—and an artificial neural network to certify the quality, purity, and origin of wines. The system can be “trained” to distinguish between cabernet sauvignon, merlot, and chardonnay. Beltran is now working to give the system the ability to recognize the valleys where the grapes were cultivated in order to certify their denomination of origin.

Gonzalo Argandona is a writer and TV producer based in Santiago, Chile.

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