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Mining in Chile

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1947 map of mines in Chile

The mining sector in Chile has historically been and continues to be one of the pillars of the Chilean economy.[1] Mining in Chile is concentrated in 14 mining districs, all of them in the northern half of the country and in particular in the Norte Grande region spanning most of the Atacama Desert.[2]

Chile was, in 2024, the world's largest producer of copper,[3][4] iodine[5] and rhenium,[6] the second largest producer of lithium,[7] the third largest producer of molybdenum,[4] the seventh largest producer of silver,[4] and salt,[8] the eighth largest producer of potash,[9] the thirteenth producer of sulfur[10] and the fourteenth producer of iron ore[11] in the world. In the production of gold, between 2006 and 2017, the country produced annual quantities ranging from 35.9 tons in 2017 to 51.3 tons in 2013.[12]

In 2021 mining taxes stood for 19% of the Chilean state's incomes.[13] Mining stood for about 14% of gross domestic product (GDP) but by estimates including economic activity linked to mining it stood for 20% of GDP.[13] About 3% of Chile's workforce work in mines and quarries but in a wider sense about 10% of the country's employment is linked to mining.[13]

Historically, coal mining had some importance in the southern half of country from the 1850s to the 1990s[14][15] with a brief revival in Invierno mine from 2013 to 2020.[16][17] In the 19th century Chile was a major producer of silver (1830s to 1850s)[citation needed] and copper (1850s to 1870s).[18][19] From 1870 to the 1930 nitrate mining was an important employment and income source for Chile.[20][21][22] Modern copper mining in Chile begun in the 1900s and 1910s with the arrival of companies from the United States which were fully nationalized in 1971 under the state-owned copper company Codelco.[23][24][25]

The governance of mining in Chile is done by non-overlapping bodies; COCHILCO, ENAMI, the National Geology and Mining Service (SERNAGEOMIN) and the Ministry of Mining.[26] SONAMI and Consejo Minero are guilds associations grouping corporate mining interests in Chile.[27]

Copper

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Main article: Copper mining in Chile
El Teniente, an underground copper mine in the commune of Machalí in the Cachapoal Province (2005)

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 blister copper. Second, state-owned Codelco, the world's largest copper producer, still had an overwhelmingly dominant role (accounting for 60 percent of Chile's copper output in 1991).

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.

Chilean copper miners

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 Pinochet regime that clearly established compensation rules in the case of nationalization and otherwise encouraged investment in this sector.

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

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Despite the decline in copper's importance, Chile continued to be affected by the vagaries of the international copper market. The fund received 0.2–0.5% of GDP, depending on the size of the budget surplus each year. In 2006, a one-off sum of $600 million United States dollars was added to the fund. The fund was replaced with the Economic and Social Stabilization Fund in 2007. The new fund received fiscal surpluses in excess of 1% of GDP.[28] The high variability of copper prices affected the Chilean economy, particularly the external accounts and the availability of foreign exchange, in several ways. In the 1987-91 period, the international copper market was very favorable; for example, copper prices in 1989 were 50 percent higher than in 1980. By May 1992, however, the price of copper had declined to about its 1980 level.

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

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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.[29] Until 2017, when it was surpassed by Australia, Chile was the over-all main producer of lithium.[30] Estimates show that Chile is expected to be surpassed also by Argentina and China in lithium production by 2030.[30] Lithium-expert Gustavo Lagos suggests that lithium production in Chile will by 2030 represent be about 8% of the world's total production.[31] Chile has the world's cheapest production costs for lithium and this could be an advantage for mining in Chile once recycled lithium enters the market competing with costly mining operations in the future.[32]

Most of Chile's lithium reserves are in Salar de Atacama and Salar de Maricunga,[29] and all lithium extracted in Chile as of 2023 comes from Salar de Atacama.[33] The only two lithium-extracting companies currently operating in Chile, SQM and Albemarle, have licences to extract lithium until 2030 and 2043 respectively.[33][34] In April 2023 Chilean government announced plans for nationalizing its lithium industry.[35] The state-owned copper company Codelco was commissioned by the government to negotiate nationalization with SQM.[34]

Gold

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Main article: Gold mining in Chile
Gold mine in Andacollo.

The amount of gold mined in Chile has fluctuated in the 2010–2023 period from a high of 50.852 kg in 2013 to a low of 30,907 kg in 2022.[36] Also in the same period 36% to 72% of the gold produced annualy in Chile was a by-product of copper mining.[36] The share of medium and small-scale mining in gold production in Chile has dropped from an average of 45% for the 2003–2005 period to 9% in 2023.[36]

Most of the economically viable gold deposits in Chile belong to two types of deposits; high-sulfidation epithermal and porphyry type.[37] Most of these deposits formed in the last 66 millions years (Cenozoic) in connection to magmatic activity in the Andes.[37] Gold from iron oxide copper gold ore deposits (IOCG), from mesothermal deposits, or of Mesozoic age (formed 66 to 252 million years ago) may in some cases be recurrent geological features but lack often large concentrations to make them profitable.[37] Almost all valuable non-placer gold in Chile occur in the northern half of the country and some deposits are grouped into belts like the Maricunga Gold Belt and El Indio Gold Belt.[37]

Almost no mining of placer gold occurs today.[38] The placer deposits of some areas of difficult access in Patagonia are subject to sporadic small-scale illegal gold mining.[26] A 2019 study found that seven of Chile's ten best placer gold prospects lie around Cordillera de Nahuelbuta.[38]

Iron

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Train moving iron ore in the industrial area of Los Colorados mine.

Since at least 2010 Chile's has each year produced 0.6% to 0.7% of all iron mined in the world.[4] Production has risen from 6.8 million metric tonnes in 2010 to more than 10 million metric tonnes each year beginning 2021.[4] Mining of iron ore deposits along the Chilean Iron Belt have been facilitated by their proximity to the ports of export at the coast, and this had in particular had an impact for the economic viability of small iron ore deposits.[39] Compañía Minera del Pacífico (CMP) is largest iron mining company in Chile.[40] Is through its parent company Compañía de Acero del Pacífico (CAP) a member of Consejo Minero, a guild of large mining companies in the country.[41] Compañia Minera del Pacífico has three main mines each with its own port for export.[42] Near Copiapó the company owns Cerro Negro Norte mine which uses the port of Punta Totoralillo, further south the company is in ownership of Los Colorados mine which uses the port of Guacolda II, and near the city of La Serena El Romeral mine is operated using the port of Guayacán in Coquimbo.[42]

In medium-scale iron mining in Chile the mines and deposits of El Carmen, Huantemé, Cerro Imán and El Dorado are important.[43]

The Dominga project led by Andes Iron seeks to establish a new iron and copper mine near the coast of northern Coquimbo Region.[44] This project has proved controversial for political and environmental reasons.[44]

Civil engineer Carlos Vattier and geologist Juan Brüggen were among the first to assess the ores of the Chilean Iron Belt in the late 19th century and early 20th century.[45][46][43][47]

Iron mining industry in the Chilean Iron Belt have had a significant presence of Chilean Hungarians since the 1950s.[48][49][50]

Iodine and nitrate

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See also: List of Saltpeter works in Tarapacá and Antofagasta

In the Atacama Desert in northern Chile there are vast superficial deposits of caliche which is a mixture of composed of gypsum, sodium chloride and other salts, and sand, and is associated to the mineral nitratine also known as "Chile saltpeter" (Spanish: salitre). The deposits contain an average of 7.5% sodium nitrate, as well as sodium sulfate (18.87%), sodium chloride (4.8%), and smaller amounts of potassium, calcium, magnesium, borate, iodine, and perchlorate. About two-thirds of the deposits are insoluble gangue minerals. The caliche beds are from 2 cm to several meters thick in alluvial deposits, where the soluble minerals form a cement in unconsolidated regolith. Nitrate-bearing caliche is also found impregnating bedrock to form bedrock deposits.[51]

Nitratine is a composite of sodium nitrate (NaNO3) and potassium nitrate (KNO3). Nitratine was an important source of export revenue for Chile until World War I, when Europe began to produce both nitrates industrially in large quantities.[51] Mining nitrate in the Far North of Chile was arguably the main economic activity of the country from 1880 to 1930.[20]

Caliche is the main iodine ore in Chile and the country is the world's prime producer of this element in addition to hosting over half of the worlds reserves of iodine.[52][53] SQM is Chile's main iodine producer.[52] Iodine at SQM is extracted from caliche ore but requires also sulphur, ammonium nitrate, sulfuric acid, kerosene, water, electricity and fossil fuel, mainly diesel.[52] SQM is Chile's main iodine producer.[52] Iodine at SQM is extracted from caliche ore but requires also sulphur, ammonium nitrate, sulfuric acid, kerosene, water, electricity and fossil fuel, mainly diesel.[52]

Other minerals

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See also: Coal mining in Chile and Chilean silver rush

Since the late 1970s, the production of gold and silver has increased greatly.[citation needed] The lead, iron and petroleum industries have shrunk since the mid-1970s, the result of both adverse international market conditions and declines in the availability of some of these resources. With a combined total value of about US$4 billion, two of the largest investments planned in Chile in the early 1990s were designated for an aluminium smelters projects in the Puerto Aisén[54] and Strait of Magellan areas.[citation needed]

In the 2005–2024 period more than half of the silver produced annually in Chile was a by-product of copper mining.[4]

There is no primary mining of cobalt in Chile with the last activity ending in 1944.[55] Cobalt resources are known from the Chilean Iron Belt near the coast of Coquimbo and Atacama regions and in the site of El Volcán in Cajón del Maipo in the Andes near Santiago.[55] Cobalt is a potential by-product of iron and copper mining along the iron belt.[55]

There is no manganese mining in Chile since 2009 when Empresa Manganeso Atacama ceased operations.[56] Until then about half of the Chilean manganese had been exported to Argentina, and mining was mainly done in underground mines.[56] Historically Corral Quemado and other areas of Coquimbo Region have produced most manganese in Chile.[57] Manganese mining in Chile and Corral Quemado had a strong peak in 1943 when it came to produce more of what was being purchased leading to large stockpiles accumulating in ports and railway stations and ultimately to a halt in mining and thus mass unemployment.[57] Trasnport costs have been a large drawback for the comercialization of manganese mined in Chile.[57] The area around Taltal was second to Corral Quemado in importance in manganese mining in the 1940s.[57] Known manganese deposits are scattered along the lenght of Chile from Arica (18.5° S) to Valdivia (39.5° S).[57] In detail the known manganese deposits concentrate in three areas; the Altiplano in northernmost Chile, the Coquimbo and Atacama regions and the metasedimentary rocks of the provinces of Cautín and Valdivia.[58]

Medium-scale mining

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class=notpageimage|
Location of mining disctrics where medium-scale mining is dominant.[59]

Most medium-scale mining is concentrated near roads or other pre-existing infrastructure, and lie thus away from the high Andes where nearly all mines belong to the large-scale mining category.[59] The mining districs of Chañaral, Copiapó, Huasco and Andacollo have most of their mining done by medium-scale mining companies.[59] The state-owned enterpise ENAMI has among it goals supporting medium-scale mining.[27] Medium-scale mining has a larger share of mining properties in the country as whole, and in Atacama Region in particular, relative to large-scale mining that is dominant in the regions of Tarapacá and Antofagasta.[60]

Medium-scale mining in Chile tend to focus on copper and produced about 4.5% of the copper mined in the country from 2017 to 2021.[61] In that period the copper extracted by medium-scale mining increased each year starting from 256 kt in 2017 ato 313 kt in 2021.[61] Besides copper other medium-scale mining activity in Chile involve gold, iron, zinc and lead.[62] The amount and share of the gold mined by small and medium scale mining in Chile has declined significantly from 2003 to 2023.[36] In iron mining El Carmen mine near Chañaral is a leading medium-scale producer.[62] According to figures from 2013 all zinc and lead mining in Chile was done by medium and small-scale miners.[62]

Small-scale mining

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As with medium-scale mining, small scale mining concentrates in lowlands and the lower elevations of the Andes, usually near roads or other relevant infrastructure.[63] The number of artisan miners in Chile, often known as pirquineros, has varied widely over the years.[26] Since 2000 in some years with high metal prices have had up to c. 14,000 small-scale miners active. On average 95% of small-scale miners work in copper mining.[26] These miners are supported by ENAMI which processes copper ore it purchases at stabilized prices.[26][64] The levels of illegal mining in Chile are low relative to neighbouring countries.[65]

See also

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References

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  1. ^ Centner, Charles William (1942). "Great Britain and Chilean Mining 1830-1914". The Economic History Review. 12 (1/2): 76–82. doi:10.2307/2590393. ISSN 0013-0117. JSTOR 2590393.
  2. ^ Andrade, Muñoz & Salazar 2025, p. 4.
  3. ^ Copper production in 2024 by USGS
  4. ^ a b c d e f Cifras actualizadas de la minería (Report) (in Spanish). Consejo Minero. 2025-03-01. p. 4.{{cite report}}: CS1 maint: date and year (link)
  5. ^ USGS Iodine Production Statistics
  6. ^ USGS Rhenium Production Statistics
  7. ^ USGS Lithium Production Statistics
  8. ^ USGS Salt Production Statistics
  9. ^ USGS Potash Product ion Statistics
  10. ^ USGS Sulfur Production Statistics
  11. ^ USGS Iron Ore Production Statistics
  12. ^ Gold production in Chile
  13. ^ a b c Cardemil Winkler, Magdalena (2023-04-04). Impactos socioeconómicos de la minería en Chile (PDF) (Report) (in Spanish).
  14. ^ Davis, Eliodoro Martín (1990). "Breves recuerdos de algunas actividades mineras del carbón". Actas. Segundo Simposio sobre el Terciario de Chile (in Spanish). Santiago, Chile: Departamento de Geociencias, Facultad de Ciencias, Universidad de Concepción. pp. 189–203.
  15. ^ Explotacion Reservas. Comisión Naciona de Energía. Accessed on September 10. 2012.
  16. ^ Pozo B., Andrés (2014-08-11). "El silencioso primer año de Mina Invierno". Diario Financiero (in Spanish). Retrieved 2023-03-15.
  17. ^ González Encina, Verónica (2022-03-08). "Copec concreta la venta de su participación en Mina Invierno". Reporte Minero (in Spanish). Retrieved 2022-06-08.
  18. ^ Sutulov 1975, p. 3.
  19. ^ Camus 2005, p. 233.
  20. ^ a b "La industria del salitre en Chile (1880-1930)". Memoria Chilena (in Spanish). Retrieved 2025-05-14.
  21. ^ "Cómo se vivió en las oficinas salitreras". Museo de Antofagasta (in Spanish). Retrieved 2025-05-15.
  22. ^ Crow, John A. (1992) [1946]. "Chile: Democracy of the Oligarchy". The Epic of Latin America (4th ed.). University of California Press. p. 647. ISBN 0-520-078683. Between 1880 and 1890 the production of nitrate more than tripled, and within that same ten-year period Chilean national revenues jumped from fifteen million to sixty million pesos. Chile actually felt four times as rich as she had been before the war began.
  23. ^ Sutulov 1975, p. 31.
  24. ^ Salazar & Pinto 2002, pp. 124–125.
  25. ^ Camus 2005, p. 245.
  26. ^ a b c d e Scholvin, Sören; Atienza, Miguel. "La formalización de la pequeña minería en Chile: logros y desafíos de la Empresa Nacional de Minería (ENAMI)". Investigaciones Geográficas (in Spanish). 66: 1–13.
  27. ^ a b Ulloa Urrutia et al. 2017, p. 50.
  28. ^ Saggu, A. & Anukoonwattaka, W. (2015). "Commodity Price Crash: Risks to Exports and Economic Growth in Asia-Pacific LDCs and LLDCs". United Nations ESCAP. SSRN 2617542.
  29. ^ 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.
  30. ^ a b "Argentina could help the world by becoming a big lithium exporter". The Economist. 2022-11-15. Retrieved 2023-04-21.
  31. ^ Lagos, Gustavo (2023-11-22). Tendencias en el mercado del litio. Clase Ejecutiva (PDF) (Report) (in Spanish).
  32. ^ Garip, Patricia (2024-04-10). "Can Chile Meet the Moment on Lithium?". Americas Quarterly. Retrieved 2025-04-11.
  33. ^ 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.
  34. ^ 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.
  35. ^ Villegas, Alexander; Scheyder, Ernest (2023-04-21). "Chile plans to nationalize its vast lithium industry". Reuters. Retrieved 2023-04-21.
  36. ^ a b c d Cifras actualizadas de la minería (Report) (in Spanish). Consejo Minero. 2025-03-01. p. 31.{{cite report}}: CS1 maint: date and year (link)
  37. ^ a b c d Cabello, José (2021). "Gold deposits in Chile". Andean Geology. 48 (1): 1–23. doi:10.5027/andgeoV48n1-3294.
  38. ^ a b Jara, J. Joaquín; Moreno, Francisco; Jara, Raúl; Dubournais, Francisco; Mata, Rodrigo; Peters, David; Marquardt, Carlos; Lagos, Gustavo (2019). "Ranking of Placer Gold Prospects in Chile Through Analytic Hierarchy Process". Natural Resources Research. 28 (3): 813–832. Bibcode:2019NRR....28..813J. doi:10.1007/s11053-018-9420-5. S2CID 169899273.
  39. ^ Millán 1999, p. 92.
  40. ^ "CMP". Consejo Minero (in Spanish). Retrieved 2025-05-10.
  41. ^ "Grupo minero CAP se incorpora al Consejo Minero y se conveirte en la primera productora de hierro en sumarse a la entidad gremial". Portal Minero (in Spanish). 2017-07-03. Retrieved 2025-04-30.
  42. ^ a b "Iron Market". CMP. Retrieved 2025-05-14.
  43. ^ a b Millán 1999, p. 192.
  44. ^ a b Laborde, Antonia (2024-12-10). "El millonario proyecto minero Dominga vuelve a las manos del Gobierno de Boric". El País (in Spanish). Retrieved 2025-05-15.
  45. ^ Millán 1999, p. 21.
  46. ^ Millán 1999, p. 23.
  47. ^ Millán 1999, p. 193.
  48. ^ Millán 1999, p. 95.
  49. ^ Millán 1999, p. 110.
  50. ^ Millán 1999, p. 113.
  51. ^ a b Wisniak, Jaime; Garces, Ingrid (September 2001). "The rise and fall of the salitre (sodium nitrate) industry" (PDF). Indian Journal of Chemical Technology. 8: 427–438. Retrieved 26 March 2022.
  52. ^ a b c d e Roche, Lindsey; Muhl, Marco; Finkbeiner, Matthias (2023). "Cradle‑to‑gate life cycle assessment of iodine production from caliche ore in Chile" (PDF). Vol:.(1234567890)The International Journal of Life Cycle Assessment. 28: 1132–1141. doi:10.1007/s11367-023-02200-x.
  53. ^ USGS Iodine Production Statistics
  54. ^ Meriches R., Juan (2006-03-31). "Aluminio: Emblemático proyecto Alumysa fue desechado definitivamente". Economía y Negocios (in Spanish). El Mercurio. Retrieved 2023-04-18.
  55. ^ a b c Townley, Brian; Díaz, Alejandro; Luca, Rodrigo (2017). Exploration and mining potential for cobalt mineral resources in Chile (Report).
  56. ^ a b Townley, Díaz & Luca 2017, p. 49. sfn error: multiple targets (2×): CITEREFTownleyDíazLuca2017 (help)
  57. ^ a b c d e Galaz-Mandakovic, Damir (2023). "Viva en la guerra, agonizante en la paz. La minería del manganeso en Chile y la inscripción estratégica del Norte Chico en el orbe de los conflictos (1884-1953)" [Alive in war, dying in peace. Manganese mining in Chile and the strategic inscription of the Norte Chico in the orb of conflicts (1884-1953)]. Perfiles Económicos. 14: 119–141.
  58. ^ Townley, Díaz & Luca 2017, p. 28. sfn error: multiple targets (2×): CITEREFTownleyDíazLuca2017 (help)
  59. ^ a b c Andrade, Muñoz & Salazar 2025, p. 24.
  60. ^ Ulloa Urrutia et al. 2017, p. 283.
  61. ^ a b Guajardo et al. 2023, p. 22.
  62. ^ a b c "The strategy is deploying medium-scale mining to survive the end of the boom". Revista Nueva Minería. 2013-08-29. Retrieved 2025-05-07.
  63. ^ Andrade, Muñoz & Salazar 2025, pp. 6–7.
  64. ^ Costabal M., Francisco (2015-06-10). Fundiciones de Cobre en Chile (PDF) (Report) (in Spanish). SONAMI. Retrieved 2025-03-23.
  65. ^ Guzmán, José Tomás (2025-03-04). "Minería ilegal en Chile: Las cifras detrás del tipo de extracción que terminó en un derrumbe fatal en Copiapó". Emol (in Spanish). Retrieved 2025-03-05.

Bibliography

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