MICLA

McGill Research Group Investigating
Canadian Mining in Latin America

Chile

Key Data

Population:17,773,894 people Area:756,102 km2 Density:23 people / km2 Demographics:White and non-indigenous - 88.9%
Mapuche - 9.1%
Aymara - 0.7%
Other indigenous groups (Rapa Nui, Quechua, Colla, Diaguita, Kawesqar, Yagan, or Yamana) - 1%
Unspecified - 0.3%
Mineral Resources:silver, copper, gold GDP:$277.2 billion GDP per capita:$15,595 GINI:50.8

History

In Chile, minerals have been extracted dating from pre-Columbian times; from indigenous peoples using copper for manufacturing tools and jewellery, to the present day large scale extraction. As such, mining, specifically copper mining, has always played a fundamental role in Chile’s economy, society, and culture as a whole. Chile is a fairly politically and economically stable country. Its democratic rule has been interrupted only twice over the past two centuries: once in the early 1920s, and once under General Pinochet’s military dictatorship from 1973-1990. The majority of Chile’s population lives in urban areas, with a third living in Santiago, the capital.

Mining Characteristics

Mining has always played a significant role in Chile’s economic stability, and can help explain certain national social welfare patterns. Copper has historically been of greatest importance to Chilean mining operations and the economy. In 1960, the National Mining Firm (ENAMI) was formed to represent small and medium sized private sector mining in Chile. As a state enterprise, ENAMI supports and enhances the production and commercialization of small-scale mining operations in Chile.

Economic Context

Over the past two decades, Chile has continuously experienced one of the higher GDPs per capita of Latin America, with mining contributing to 8% of the GDP in 2003. Though the mining sector still dominants Chile’s exports, with copper exports making up approximately one third of government income, Chile is working to diversify its export products. In addition, Chile is increasing trading partnerships with surrounding Latin American countries.

Political Context

In 1971, Chile nationalized copper mining. Before this date, the Kennecott Corporation and the Anaconda Copper Company (both American companies) conducted most of the copper extraction activity. The nationalization transferred any installations or deposits belonging to Kennecott or Anaconda to the state, by means of the Corporación Nacional del Cobre de Chile (Copper Cooperation of Chile) Codelco. Codelco was formed in 1976, is state owned, and is among the world’s largest copper producers. In 1981 Chile passed the Ley Minera (mining law), which established mine ownership rights for many national bodies. In 1992, the Codelco Law was passed, which permitted Codelco to form joint ventures with the private sector, and thus initiated an influx of domestic and foreign mining firms activity, and foreign firm ownership in Chile. Codelco is the largest single contributor to Chile´s economy.

Social Context

Chile has experienced substantial social reforms over the past several decades. Improvements in living conditions have reduced poverty levels by 50% since 1990: its poverty rate is lower than most other Latin American countries. However, Chile still suffers from extreme wealth distribution problems, with an accumulation of wealth and high non-monetary human development indicators in northern provinces and urban regions, such as the nation’s capital Santiago. This wealth accumulation and increased standards of living in the north may be attributed to high mining activities in those regions. Chile’s income inequality ranks among one of the worst within the OECD.

Bibliography

“Chile.” The World Bank. January 1, 2015. Accessed January 27, 2015. http://data.worldbank.org/country/chile#cp_wdi.

“Chile Demographics Profile 2014.” Index Mundi. August 23, 2014. Accessed January 27, 2015. http://www.indexmundi.com/chile/demographics_profile.html.

“Nosotros.” CODELCO. Accessed January 27, 2015. http://www.codelco.com/la-corporacion/prontus_codelco/2011-06-21/164601.html.

“ENAMI – EMPRESA NACIONAL DE MINERIA.” English Overview. Accessed January 27, 2015. http://www.enami.cl/english-overview/english-overview.html.

“Chile The Challenge of Mineral Wealth: Using Resource Endowments to Foster Sustainable Development.” International Council on Mining & Metals. March 1, 2007. Accessed January 27, 2015. http://www.icmm.com/document/278.


Timeline of Key Events

2012
2011