Copper has been mined in Chile for centuries. In 1898 explorer discovered a body trapped in a mine shaft from 550 AD. But large scale copper mining did not begin until the 19th Century.
In 1810, the time of Chile's independence from Spain, Chile produced 19K tons of copper. From 1820 - 1900, Chile produced 2M tons of high grade copper. Chileans were focusing their mining on high content veins, whereas American engineers developed methods to extract copper from low grade mines through a process of oxidization. With these new methods and capital from investors, an engineer named Cooper and the Guggenheim Brothers formed the Chilean Exploration Company and gradually bought up a Chuquicamata copper field, ramping up extraction to 600,000 tons annually in the 1960's.
By the late 1950's the three main fields for Chilean copper, Chuquicamata, El Salvador and El Teniente were owned by Anaconda Copper (Montana, US) and Kennecott Utah Copper (Utah, US).
In 1969, then Christian Democratic Party President Eduardo Frei Montalva began what is known as negotiated nationalization. With these negotiations, Chile assumed control of 51% of mines from Anaconda. The Chilean Socilaist Party met these negotiations with much criticism and made total, uncompensated, Chilean nationalization of the copper mines a major political point in the elections of 1970.
Socialist candidate Salvador Allende won the election and in 1971 the congress agreed to nationalize the mines with no compensation paid to foreign owners. Operations of the nationalized mines were turned over to a government agency created by President Frei, the Copper Corporation of Chile. Only two years later Allende was murdered in a bloody military coup which turned power over to a military Junta, headed by Augusto Pinochet.
Pinochet did not, however, re-privatize the copper mining operations. Rather, he paid Anaconda $250M in reparations, collected the mines of the Copper Corporation of Chile into the National Copper Corporation of Chile (CODELCO) and maintained CODELCO as a state run company, funnelling 10% of profits to the military.
In 1990, the same year Pinochet leaves the dictatorship, CODELCO's CEO secured the passage of a law allowing the company to do business with foreign entities. By 2013, Copper accounted for 20% of Chilean GDP and 60% of its exports. Those numbers owed much to the boom in Chinese demand. With the commodities markets crashing, one wonders what the future will hold for this part of Chile's economy.
In 1810, the time of Chile's independence from Spain, Chile produced 19K tons of copper. From 1820 - 1900, Chile produced 2M tons of high grade copper. Chileans were focusing their mining on high content veins, whereas American engineers developed methods to extract copper from low grade mines through a process of oxidization. With these new methods and capital from investors, an engineer named Cooper and the Guggenheim Brothers formed the Chilean Exploration Company and gradually bought up a Chuquicamata copper field, ramping up extraction to 600,000 tons annually in the 1960's.
By the late 1950's the three main fields for Chilean copper, Chuquicamata, El Salvador and El Teniente were owned by Anaconda Copper (Montana, US) and Kennecott Utah Copper (Utah, US).
In 1969, then Christian Democratic Party President Eduardo Frei Montalva began what is known as negotiated nationalization. With these negotiations, Chile assumed control of 51% of mines from Anaconda. The Chilean Socilaist Party met these negotiations with much criticism and made total, uncompensated, Chilean nationalization of the copper mines a major political point in the elections of 1970.
Socialist candidate Salvador Allende won the election and in 1971 the congress agreed to nationalize the mines with no compensation paid to foreign owners. Operations of the nationalized mines were turned over to a government agency created by President Frei, the Copper Corporation of Chile. Only two years later Allende was murdered in a bloody military coup which turned power over to a military Junta, headed by Augusto Pinochet.
Pinochet did not, however, re-privatize the copper mining operations. Rather, he paid Anaconda $250M in reparations, collected the mines of the Copper Corporation of Chile into the National Copper Corporation of Chile (CODELCO) and maintained CODELCO as a state run company, funnelling 10% of profits to the military.
In 1990, the same year Pinochet leaves the dictatorship, CODELCO's CEO secured the passage of a law allowing the company to do business with foreign entities. By 2013, Copper accounted for 20% of Chilean GDP and 60% of its exports. Those numbers owed much to the boom in Chinese demand. With the commodities markets crashing, one wonders what the future will hold for this part of Chile's economy.