Copper Mining in Chile

Copper Mining in Chile
Katarzyna Staniewska / Chile

For many a century, mining – and especially copper mining – has played an important part in the Chilean economy. Chile’s copper mines are mostly situated in the Atacama Desert. As of now, they experience a boom due to the ever-increasing demand on copper worldwide. But while the mines of today are still expanding, in future decades copper recycling and substitution will make necessary a re-orientation of the Chilean economy.

Mining has a rich history and tradition in Chile, and the country has been primarily sustained by this industry for centuries. The oldest mine in the Americas has been found next to the city of Tal Tal in the northern part of Chile (Antofagasta Region). Iron oxide, used primarily as a pigment, was exploited as early as 12.000 years ago.

According to archeologists, the mine was dug by the Huentelaquen people, the first settlers in the region. A great contribution to the development of geology in Chile has been made by Polish scientist Ignacy Domeyko (born 1802 Niedźwiadka Wielka – died 1883 Santiago de Chile), who in difficult historic times for his home country moved to Chile. He taught chemistry and mineralogy in Coquimbo and travelled around the country studying its geology. As chancellor of the University of Chile he modernized secondary and tertiary education. His investigation initiated progress in the mining industry and helped the country, which had been poor until then, to become wealthier and gain its independence.

Modern mining history in Chile started with the saltpeter boom of the 19th century. Numerous saltpeter refineries contributed around 30% of national income. This lasted until the ammonia synthesis was developed by Fritz Haber and Carl Bosch. Nowadays only a few saltpeter refineries are still working while most of them have become ghost towns in the middle of the desert that attract numerous tourists. Caliche and continental brines are still successfully extracted by the SQM company, though the emphasis is mostly on iodine and lithium used in modern industries. Worth mentioning is that the Salar de Atacama is the location of the world’s largest brine mine and Chile is the number one in the production of nitrate, iodine, and lithium.

But neither the saltpeter industry nor iodine or lithium contribute most to the national income – the leading mineral is copper. Copper has been extracted and used by humanity for many centuries but the recent growth of the electronic industry has immensely increased the world’s demand for copper. Copper is used in building construction, power generation and transmission, electronic product manufacturing, and the production of industrial machinery and transportation vehicles. Depending on the model, a car contains on average 20-45 kg of copper.

Today Chile is the country with the highest copper production in the world, leaving its competitors far behind. While Chile makes up about 34% of the world’s production, the next in rank, the USA, China and Peru, reach only about 7 % each. Although the question which country in the world has the highest copper reserves remains open, it is most probable that the biggest reserves on earth are those in the Atacama Desert. Molybdenum and gold are secondary products of copper extraction, and Chile places itself in second and fifth position respectively among the world’s producers. Chile’s economy is based on copper mining. Thanks to this industry, Chile is the richest country in South America but at the same time vulnerable to any fluctuation of copper prices. This base metal is extracted mostly from porphyry copper deposits that are characterized by high tonnage and low concentrations.

At the beginning of the century, deposits with metal concentrations from 1-2 % began to be profitable. Now rock containing more than 0,3 % of copper can be extracted with profit due to high demand and technological processes that enable higher prices and lower production costs.

Advantages are the political stability of the country and the location of deposits. All Chilean mines are relatively close to the coast, which makes transport relatively cheap and at the same time production costs lower.

But why is it that Chile has so much copper? The western coast of South America is a subduction zone with high seismic activity and many volcanoes along the Andes mountains. In this geological setting porphyry formed copper deposits, the Chilean deposits Chuquicamata, Escondida, Collahuasi and El Teniente being some of the biggest in the world. Chile has a rather low population density with c. 40% of its citizens living in the capital, while the northern part of the country is covered by the Atacama Desert.

Therefore, the environmental impact of mining is relatively low, and enormous volumes of rock can be extracted. Three types of mining can be distinguished in the country: big open pit mines, small mining industries, and pirquineros. The huge open pit mines Chiquicamata and Escondida together make up almost 10% of the world’s production; Escondida is the mine that produces most copper worldwide. It had been supposed that Chuquicamata would be closed soon but underground extraction has begun instead. The pit of Chuquicamata is the biggest in the world with 800 ha surface and 1250 m depth.

Escondida means literally ‘hidden’ as it took years to find this huge deposit. Many companies had been performing exploration drilling campaigns for decades but it was J. David Lowell that finally struck. This industry does not stand still. Other mines like Spence are constantly growing, and new ones are beginning their operation.

Most of them are located in the Atacama Desert. Only in Sierra Gorda district, Spence, El Tesoro, and Esperanza are extracting copper, and Quadra is starting its operation. And there are many exploration projects of which only few have already reached the feasibility stage.

There are mines that had been exploited for years and were scheduled for closing like Michilla and Mantos Blancos. Yet after new exploration campaigns the deadline has been postponed as more resources have been discovered. As the rock processed 20 years ago had a much higher copper concentration than the one extracted now, old waste dumps have copper concentrations that are profitable today and can be exploited. Small mining industry is mostly concentrated in the central part of the country. This includes the famous San Jose mine where, unfortunately, safety has been neglected. The growth of the mining industry is so fast that a lack of state control and a lack of professionals are a daily issue. As a rule, small and medium companies run underground mines. The major deposits are almost entirely open-pit mines, with the exception of El Teniente claiming to be the biggest underground copper mine in the world.

„Pirquineros“ are freelancers searching for copper-rich veins and selling the rock to the mines. In many families it became a traditional profession, in some cases sons of pirquineros turned professional miners. Are we going to run out of copper one day? Latest estimations claim that Chile has more than 100 million tons of fine copper reserves.

This does, of course, not include new deposits that are being discovered at present. The global demand is about 16 million tons per year which means that if the production continues at the level of c. 5 million tons a year, in about 20 years’ time we could get into trouble.

On the other hand, the world’s demand is expected to reach 20 million tons in the next 25 years, which exceeds the present production by far. This demand will influence the metal price and may cause a need for developing and using copper substitutes. This is why all leading mining companies are trying to boost their inversion strategies in the face of growing demand in order to assure the supply of copper. The focus now is looking for new mineral deposits – not only nation- but worldwide. Most of the companies operating in the country are international, like Bhp Billiton, Anglo American, Barrick, Xstrata Copper, and others. On the other hand, Chuquicamata and El Teniente belong to the state-owned company Codelco, together with a bunch of other mines with growing production. The national competitor Antofagasta Minerals belonging to Luksic group is also gaining in importance.

Fortunately for all of us as users a third of all used copper is already being recycled, and the good news is there is no loss in the process. As this is probably going to be the future, Chile will have to adjust to the new reality by educating new professionals and fostering other industries starting from now.