Chile's copper production

Chile is the world’s leading producer of copper, which accounts for most of the total value of the nation’s exports. Other primary resources that are the bases for exports include evaporites, containing several important trace minerals (iodine, lithium, and boron); marine resources for fish and fish products; agricultural land for growing fruits (especially grapes) and nuts; and forestland for wood, paper, and paper products.

The Country

Chile is on the southwestern margin of South America. The Pacific Ocean lies to the west, and Argentina and Bolivia are to the east. The country’s territory runs north to south for approximately 4,400 kilometers. Its greatest width is barely 160 kilometers. The Atacama Desert in the north is one of the world’s driest. The Andes Mountains extend the length of the country and form a natural barrier between Argentina and Bolivia. Chile is slightly smaller than Texas.

Geology, climate, and nutrient-rich coastal waters are the bases for a wealth of primary resources, but mining dominates Chile’s economy. It is the world’s leading producer of copper, a metal of vital importance to the global economy for its use in coins, wiring, and construction. Chile has three distinct economic regions—the north, the south, and the middle—that contribute to the export-based economy. The north is one of the world’s main sources of copper and related metals. The relatively high content of iodine, lithium, and boron mined from the salars (salt flats) of the north has global significance. The south contributes fish and timber products. The middle exports fruits, vegetables, fish, and copper.

Copper Ore

In 2023, Chile was the world's largest copper producer, a position it had held for more than thirty years. Copper-related products account for almost 50 percent of the country's exports. Chile had ten large copper mines; most were in northern Chile. In that region, broad, open-pit mines operated along the western edge of the Andes Mountains, because the deposits are in geologic faults near the surface. The region included the Escondida mine, one of the world’s largest open-pit copper mines. The mine began operating in 1990 and accounted for nearly 4.5 of global copper production. An international consortium (Australia, the United Kingdom, and Japan) operated the mine. The Chuquicamata mine, another large copper mine, is state-owned. The deposits of copper in middle Chile are also in the Andes, but they are so deep underground that they require tunneling to extract the ore, which is more expensive than open-pit mining.

Chile used to simply mine the copper ore, crush it, and then export it to other countries for processing. However, beginning in the early 1990s, direct investments by foreign companies helped upgrade the nation’s copper mills to include the process of smelting, which involves melting the ore to remove nonmetal impurities. Shipping the resulting concentrate saves money by reducing transportation costs. The country that imports the copper concentrate finishes the refining process by melting it into copper slabs. Asia was by far the leading importer of Chilean copper. Chilean companies were not likely to build their own refineries, as the high costs of importing fossil fuels to generate electricity make installing additional refining capacity less profitable than continuing to ship ores and concentrates abroad. The government could increase the capacity of hydroelectric dams in the Andes Mountains in order to help fill the shortfall in energy needs. However, it has been reluctant to do so because the dams are in environmentally sensitive areas.

Iodine

The origin of iodine is a mystery, but it is believed to have come from organic films on the sea surface or from gases and sublimates associated with Andean volcanism. Either way, the iodine is believed to have entered the atmosphere, and then surface and absorbed and transported it into the northern Chile’s Atacama Desert, where it was oxidized to iodate and mineralized with nitrates in the caliche deposits. At first, Chile’s iodine production was a by-product of the production of sodium nitrate fertilizer from the caliche deposits. Later, it was extracted from abandoned nitrate ores and that remained from earlier nitrate mining. The caliche ores and tailings were mainly in the northern section of Chile’s Central Valley, in Tarapacá and Antofagasta Provinces. The crushed caliche and tailings were leached in evaporation ponds to produce a solution containing sodium nitrate and calcium iodate. After the sodium nitrate precipitates in the ponds, the remaining liquid was stripped of iodine. About 60 percent of global of iodine were in northern Chile. Chile accounted for 60 percent of the global production, making it the world’s leading exporter of the mineral. Chile’s production of iodine was significant, because iodine deficiency causes an increase in child mortality, mental retardation, and miscarriages. Some governments require food manufacturers to include iodine in certain food products as a means of preventing maladies associated with iodine deficiency.

Lithium

Most of the world’s lithium is mined in Chile. Lithium is a rare metallic that is concentrated naturally in two main settings. It mineralizes in an environment during the formation of silicic and rocks and it appears in salt compounds as lithium carbonate and lithium chloride in dry lake beds of deserts. Thus, mining lithium involves hard-rock mining or salt-mining in ancient lake beds. Both forms of lithium concentration are rare geographically, but the lithium in lake-bed salts (or brines) is much easier to mine. Hard-rock mining was the primary source of lithium until miners discovered that certain lake beds in northern Chile had significant deposits of the metal. The first Chilean mine started producing lithium in 1986. In 1997, Chile replaced hard-rock mining operations in the United States, where most of the world production of lithium was taking place, and became the world’s leading exporter of lithium. Chile provides about 30 percent of global supply in 2023. Chile has three-fourths of the world’s reserves of lithium. The is mined from the brines in salars in northern Chile’s Atacama Desert. The deposits there are in a series of basins. The Chilean company Sociedad Química y Minera (SQM) mines the Salar de Atacama, which held about 20 percent of the world's lithium reserves as of 2023. The SQM operation also produces potassium sulfate as a by-product. Two processing plants in Antofagasta, a seaport in northern Chile, refine and package the lithium for shipment overseas. Among other uses, lithium has become important in the manufacture of rechargeable batteries for hybrid cars, laptop computers, and cell phones.

Boron

Chile accounts for about 10 percent of the global production of boron. Chile’s borate deposits are in high-desert basins in the Puna region of the Andes Mountains, which overlaps the borders of Chile, Argentina, and Bolivia. In Chile, borate deposits are found in two formations, salar and caliche. Both formations are at about the same depth below the surface. Salar deposits are what remain after lake water evaporates. Chile has a large number of dry lake beds, but only six (Ascotan, Aguas Calientes Sur, Atacama, Quisquiro, Pajonales, and Surire) contain commercial borate. The borate is in layers that average between 1 to 2 meters below the surface and range from 1 centimeter to 1 meter thick. The second source of borate is caliche, a puzzling layer of sodium nitrate in the Atacama Desert, Chile’s northern coastal desert. No one knows for sure how the caliche formed. The most common theory is that rocks in the moist Andes experienced underground weathering that produced nitrate salts, which contained borate compounds, and then groundwater seepage transported the salts to the lower valleys of the Atacama Desert. The nitrates accumulated near the surface there through a process driven by surface evaporation and hygroscopic and capillary activity. The resulting ore grade nitrates accumulated from 1 to 5 meters below the surface in a vast, almost continuous deposit that stretches north-south for 700 kilometers and east-west for a distance of 10 to 150 kilometers.

There are two large boron mining operations in the northern desert. The largest producer of borate is Quiborax. The company has mining operations at Salar de Surire near the Bolivian border. It has smaller operations on Salars Ascotan and Pajonales, and it operates a boric acid plant in the northern seaport town of Antofagasta. The second company is SQM, which produces boric acid as a by-product of its lithium mining operation on Salar de Atacama. Chilean boric acid and other boron-based products are exported to the United States, Brazil, and several countries in Asia. In addition to boric acid, boron-based compounds are used in the manufacture of such items as cosmetics, soaps and detergents, flame retardants, glazes on ceramics, and fiberglass.

Forests

Forestry is the most important economic activity of southern Chile. Large, privately owned sawmills dot the landscape. Band saws cut straight-trunk logs of fir and araucaria pine into narrow slabs of quality lumber for export. Each mill has a wood chipper that makes chips from low-grade wood. Pulp mills turn the chips into an oatmeal-like pulp. The mills then process the pulp into paper, cardboard, and particleboard products. The chemical industry also uses the pulp. Chile’s forestry industry specializes in making wood pulp; only Canada, the United States, Brazil, and Sweden produce more. Chile has been the world’s sixth largest exporter of wood chips, pulp, and waste paper. China and Italy are the main trading partners for the Chilean exports.

In order to conserve natural forest areas, the pulp industry depends heavily on fast-growing, commercially planted trees, such as eucalyptus (from Australia) and radiata pine (from Austria). About one-half of Chile’s pulp production comes from such trees. Southern Chile’s west coast marine is most conducive to the fastest tree growth, making Puerto Montt and the Chiloé Island the main pulp and lumber centers. Wood chips, pulp, lumber, and other wood products are the region’s most valuable export. China, Japan, and the United States import most of these products.

Fish

The nutrient-rich waters of the Humboldt Current are the main basis of Chile’s large fishing industry. The nation ranks in the top five in the world production. Northern Chile contributes a great deal to this status. The catch includes anchovy, jack mackerel, and pilchard. Iquique, in the north, is one of the world’s principal ports for its huge fishmeal exports. Fishmeal is ground-up dried fish. Anchovies, in particular, make up this product. Fishmeal is high in protein and therefore an excellent livestock food supplement. Fish oil, a by-product of fishmeal production, is an additive for the manufacture of many items, ranging from margarine to inedible varnishes and waterproofing agents. Every three to seven years, El Niño warming events cause declines in fish populations in northern Chilean coastal waters, which hurt the economy of the region. Anchovy populations, in particular, decline during these events.

Fishing for export is also a chief income source in southern Chile; Puerto Aisén is the area’s main fishing port. This region is known for its salmon farming, which involves raising salmon in enormous floating cages tied to the seabed. Beginning in 1990, fish farming grew steadily and became increasingly important to Chile’s total exports. Chilean salmon has become known for its boneless salmon filets and delicate smoked sliced salmon. However, the industry has been plagued by a parasitic bacterium, rickettsia, carried by sea lice, which causes infection-prone lesions.

Agricultural Land

Due in part to a favorable environment, middle Chile is a major center for agricultural exports. The area has more than 50 percent of the country’s total agricultural landholdings. Most of the production takes place in the Central Valley section. Because of the fertile soils, reliable water supply, and mild climate of the valley, the country’s annual export earnings from fruits and nuts alone are between $1 and $2 billion per year. The country consistently ranks in the top ten for fruit exportation. Vineyards for table grapes and wine-making take up more land than any other fruit crop in the Central Valley. The production is for the international market. Each summer, the area’s table grapes, as well as strawberries and raspberries, are the first in Chile to ripen and the first to hit US supermarkets, usually around Christmas. The Central Valley is responsible for the nation’s high world ranking in exports of wine as well as table grapes. Grains are also widespread in the middle Chile region, particularly wheat, which occupies more than half the cropland. Fruit trees occupy much of the remaining land. The Mediterranean climate of middle Chile also allows the planting of commercial orchards of apples and avocados, which are extensive in hilly sections of the region. Other tree crops include lemons, oranges, nectarines, kiwifruits, and cherries.

Other Resources

Chile accounts for a wide range of other industrial minerals. It accounts for approximately 7 percent of the global supply of gold, 6 percent of selenium, 3 percent of sulfur, 2.6 percent of phosphate rock, 2.5 percent of silver, 2.5 percent of salt, and between 2 percent of both diatomite and potash. The country’s copper mines produce some of the silver, gold, selenium, and molybdenum, as the same geologic environment forms these minerals. Chile ranks relatively high in world production of each metal.

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