Mining in Chile
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The mining sector in Chile is one of the pillars of
Nitrate
Mining nitrate in the North of Chile defined the country's history from the late 19th century to the mid 20th. Indeed, the period 1873-1914 is referred to as the Saltpetre Republic.
Copper
Although the relative importance of copper declined in the 1970s and 1980s, it was still the Chilean economy's most important product in 1992. The mining sector represented 6.7 percent of GDP in 1992, as compared with 8.9 percent in 1985. In 1991, copper exports represented 30 percent of the total value of exports, a substantial decline with respect to the 1960s, when it represented almost 80 percent of total exports. Mining exports in general accounted for about 48 percent of total exports in 1991.
Two developments in the copper sector were noteworthy. First, in the 1987-91 period, there was a substantial increase in the output of refined copper, as well as a relative decline in the production of
The so-called Codelco Law of April 1992 authorized Codelco for the first time to form joint ventures with the private sector to work unexploited deposits. Thus, in a major step for Codelco, in 1995, it invited domestic and foreign mining firms to participate in four joint explorations in northern Chile. Foreign owned private firms were to become increasingly important as new investment projects got underway.
The heightened importance of these foreign private firms in large-scale copper mining also resulted from the international business community's improved perception of Chile and from a mining law enacted during the
Given this more favourable context, Phelps Dodge, a United States mining company and the Sumitomo Metal Mining Company, a Japanese firm, signed a US$1.5 billion contract in 1992 with the Chilean government to develop Candelaria, a copper and gold mine south of Copiapó. The mine's potential production of refined copper was equivalent to about 10 percent of Codelco's entire production.
Copper Stabilization Fund
Despite the decline in
The government decided to counteract the effect of the variability of copper prices by creating the Copper Stabilization Fund, which worked as follows: whenever the price of copper increased, the government would direct a proportion of the increased revenues into the fund; these resources would then be used during those years when the price of copper fell below its "normal" level. This institutional development helped Chile at least partially free itself from the volatility of the copper market. The Copper Stabilization Fund is occasionally tapped into if there is a major need for more money. Part of the fund will be used to help pay for reconstruction after the devastating 2010 Chile earthquake.
Lithium
Northern Chile forms part of the Lithium Triangle with substantial reserves in the form of brine. The explosive growth in electric vehicles since 2015 has triggered increased demand.
Chile is the main producer of lithium from brine.[13] Until 2017, when it was surpassed by Australia, Chile was the over-all main producer of lithium.[14] By one estimate Chile will be surpassed also by Argentina and China in lithium production by 2030.[14]
Most of Chile's lithium reserves are in Salar de Atacama and Salar de Maricunga,[13] and all lithium extracted in Chile as of 2023 comes from Salar de Atacama.[15] The only two lithium-extracting companies currently operating in Chile, SQM and Albemarle, have licences to extract lithium until 2030 and 2043 respectively.[15][16] In April 2023 Chilean government announced plans for nationalizing its lithium industry.[17] The state-owned copper company Codelco was commissioned by the government to negotiate nationalization with SQM.[16]
Other minerals
Since the late 1970s, the production of
SQM is also a significant iodine producer.
Almost no mining of placer gold occurs today.[18]
See also
- Geology of Chile
- Law on Mining Concessions
- Nitratine or Chile saltpeter, the naturally occurring form of sodium nitrate
- List of Saltpeter works in Tarapacá and Antofagasta
References
- ^ Copper production in 2019 by USGS
- ^ USGS Iodine Production Statistics
- ^ USGS Rhenium Production Statistics
- ^ USGS Lithium Production Statistics
- ^ USGS Molybdenum Production Statistics
- ^ USGS Silver Production Statistics
- ^ USGS Salt Production Statistics
- ^ USGS Potash Product ion Statistics
- ^ USGS Sulfur Production Statistics
- ^ USGS Iron Ore Production Statistics
- ^ Gold production in Chile
- )
- ^ a b Cabello, J. (2022). Reserves, resources and lithium exploration in the salt flats of northern Chile. Andean Geology. 49 (2): 297–306. doi: 10.5027/andgeoV49n2-3444. Retrieved July 2, 2022.
- ^ a b "Argentina could help the world by becoming a big lithium exporter". The Economist. 2022-11-15. Retrieved 2023-04-21.
- ^ a b Munita C., Ignacia (2023-04-21). "Control estatal de los salares, negociar con SQM y empresa nacional: Las claves de la estrategia del Gobierno por litio". Emol (in Spanish). Retrieved 2023-04-21.
- ^ a b Browne R., Vicente (2023-04-21). "Las razones del desplome bursátil de SQM tras el anuncio presidencial del litio". Ex-Ante (in Spanish). Retrieved 2023-04-21.
- ^ Villegas, Alexander; Scheyder, Ernest (2023-04-21). "Chile plans to nationalize its vast lithium industry". Reuters. Retrieved 2023-04-21.
- S2CID 169899273.
External links
- Chris Kraul (March 17, 2010). "Chile will tap copper fund to pay for quake reconstruction". Los Angeles Times.
- Chile's mining industry, Amcham Chile in 2006