Industrial and commercial South America

Although Chile is often compared to California, to which State it has some but not a close resemblance in length, partial dryness, earthquakes, and fruit, the specialty of Chile is not shared by California. Chile and nitrates are almost synonymous terms. A thought of one suggests the other. The greater part of the nitrate country earlier belonged to Peru, some also to Bolivia; and both countries still bewail their loss.

Mining

The Nitrate Fields we know are in the north, chiefly in the Provinces of Tarapacá, Antofagasta, and Atacama. If this desert land does not blossom as the rose, it produces the wherewithal to make other fields blossom, and the wealth to purchase the roses. The richest deposits are mainly along a stretch of 300 miles from Pisagua in Tarapacá, to Coquimbo. With an average width of 2¹⁄₂ miles, the fields are at a distance of from 10 to 80 miles back from the coast, and at a height of 2000-5000 feet. The deposits, which are not in continuous fields, are sometimes on the surface, but oftener overlaid with strata of earth several feet thick. The raw material called caliche contains from 20 to 65 per cent nitrate of soda. After pickling in tanks 8-12 hours, the liquid, caldo, is run off, the sand and refuse dropping to the bottom. When ready for export the article carries 15-16 per cent nitrogen and 36 per cent sodium. Commercial nitrate is a white cheese-like substance, which is used in manufacturing the highest grade of gunpowder, also to produce nitric and sulphuric acid; but the bulk of it in ordinary times is employed as a fertilizer, doubling and tripling the harvest. Within recent years the demand and in consequence the production has greatly varied, the partial recovery in 1920 being soon followed by a depression.

A by-product is a yellow liquid, which being chemically treated leaves a blue crystal, iodine, which costs as much an ounce as saltpetre per 100 pounds. Being worth $700-$800 a cask it is shipped in treasure vaults with bullion. The nitrate establishments called oficinas provide good salaries, and the best possible quarters for their officials, and they are interesting to visit. As a mineral, the nitrate is distinguished from guano although believed by some to have the same origin. British companies have long been engaged in this industry. American interests have more recently acquired holdings. The Du Ponts have three properties covering 14,000 acres.

The chief ports of this region are Iquique and Antofagasta, Pisagua being a smaller port visited only by the caletero or the strictly freight boats. Iquique is a more agreeable city than in former days, when water was sometimes $2 a gallon, and people drank champagne, they said, because water was too expensive. Now the dust of the streets is laid by sprinklers, some people have bath rooms, a few even fountains in patios. Antofagasta is also a desert place, unattractive to look at, but with good shops, business houses, and fair hotels. The water comes a distance of nearly 200 miles, the source more than two miles above the sea.

Potash. In addition to nitrates Chile possesses extensive beds of useful potash one of which is estimated to contain nearly 7,000,000 tons easy of exploitation.

Copper. The property of the Chile Copper Company (one of the Guggenheim interests) at Chuquicamata is said to be the largest copper deposit known in the world. About 2000 of the 9600 acres of the claim are mineralized. The outcrop of copper is one and a half miles in length. It has been proved below to a width of 1800 feet and a length of 7500 feet. Ten of the 2080 shafts are over 1000 feet in depth, and at 1500 feet the ore is of commercial value. Over 700,000,000 tons of positive and probable ore have been developed, carrying an average value of 2.12 per cent copper. The reduction plant has a capacity of 15,000 tons a day, the refinery of 180,000,000 pounds a year. With a 90 per cent extraction the yield is 96 pounds of copper per ton. At the port of Tocopilla, north of Antofagasta, the Company has a power station where oil from California is used to generate a power of 24,000-27,000 kilowatts needed at Chuquicamata. This is transported by wire across country a distance of 100 miles. At normal prices the cost of copper production with delivery in New York or Europe is $121 a ton, or about 6 cents a pound; higher with war time conditions which still obtain (1921). From the 15,000 ton plant in full service 175,000,000 pounds of copper would be produced annually. In 1920, 55,617,000 pounds were produced, the largest amount from any mine in Chile. In 1916 important mines belonging to the Calama Mining Company were added to the Chile Company’s holdings.

The Braden Copper Company, another Guggenheim interest, owns about 2300 acres in the Province of O’Higgins. They have a concentrator, a smelting and converting plant, a hydro-electric power plant with 800 kilowatt capacity and an electric and a steam railway; the latter, 43 miles long, connecting the property with Rancagua, which is on the Central Railway 43 miles southeast of Santiago. The ore is of concentrating copper, a sulphide in brecciated andesite, around an extinct volcano. It runs about 2.5 per cent, with an earlier production cost in New York of 6.5 cents a pound, but now higher. In 1916, 1500-1800 men were employed. The plant, recently enlarged, is not working to capacity. In 1917, 64,000,000 pounds were produced, over 77,000,000 in 1918, with diminishing demand, 40,000,000 in 1920.

Another American syndicate has acquired the Tamaya Copper Mines in the Province of Coquimbo between Ovalle and Tongoy, the latter, a minor port 27 miles south of Coquimbo, sheltered from north winds, with smelting works in the place. With an efficient pumping plant and other improvements installed, the mines are expected to yield large production. Other companies, native, British, and French are engaged in copper mining at Carrizal and elsewhere.

Iron. Coquimbo, a Province with local importance for agriculture, is notable for its deposits of iron ore, said to amount to a billion tons. Only one of these has been worked, a deposit located at Tofo, about four miles east of Cruz Grande, and 30 north of the city of Coquimbo. This property was leased in 1913 by the Bethlehem Steel Company from a French Company which had developed the mine to some extent and produced ore. The ore appearing as the top of a large hill will be mined by electric shovels and transported by an electric railway to docks at Cruz Grande. The amount of ore is very large though with exact tonnage undetermined. The Company is still exploring the deposit at depth.

The mines and railway are completely equipped. At Cruz Grande a basin dock has been constructed with large storage pockets into which the ore will be discharged from the railway cars, and from which it will go directly into the vessels. The Steel Company is constructing steamers of 20,000 tons to carry the ore to the United States for use in their furnaces. The ore is very pure averaging about 67.50 per cent iron. It is a dense ore reddish black in color, a mixture of magnetite and hematite.

The French Company formerly controlling Tofo had erected a steel plant at Corral intending to transport the ore thither. There is no iron ore near there and the plant is not operating.

Of the other deposits in Coquimbo and farther north some are of considerable size, but none is located so near the coast as Tofo and none has been developed.

Other metals existing in Chile are at present of less importance and slight operation. A moderate gold output accompanies the production of copper, and there is some placer mining, especially in the south. Deposits are known to exist in many Provinces from Tacna to Tierra del Fuego. Silver too exists, but its production is chiefly as a by-product. Lead, zinc, molybdenum, and tungsten are exported in limited quantities.

Coal, following nitrates, is of the first importance among ordinary minerals, a source of large wealth though the production, about 1,700,000 tons yearly, is insufficient for the needs of the country. Little is therefore exported and a good deal is normally imported from Great Britain and Australia; until recently a little only from the United States. Most of the mines in operation, owned by ten companies, are near the ports of Talcahuano, Coronel, and Lota. The coal is not equal in quality to the British, but it has been used by steamships, railways, and mines with fair results. Coronel or Lota, five miles apart on Arauco Bay, one or the other, is a regular port of call for steamships. The Cousiño property at Lota was purchased in 1852 and later was conducted by the son’s widow, under her administration the greatest financial enterprise carried on by a Chilian. At her death she was called the richest woman in the world, leaving a property of $70,000,000. The capital of the company is $20,000,000. The mines are one-fourth of a mile deep and extend under the sea, where there is good rock and no drip. Here are streets, restaurants, offices, stalls for horses, blacksmith shops, etc.

A British Company, the Arauco, in addition to coal properties operates its own railway with 62 miles of main line and branches, besides mining spurs. It has four daily trains from Concepción to Lota, Coronel, and beyond, passing over the Bio-Bio River by a bridge of 1¹⁄₄ miles, the longest in South America. Of coal about 1¹⁄₂ million tons are produced and as much more is imported.

Petroleum is believed by Chilians to exist in large quantities, but the present development is infantile. It has been found in southern Chile, on the Island of Chiloé and in the Patagonas district, as well as in the north near the Bolivian frontier. Large quantities are imported principally from Peru, normally about 400,000 tons a year. Oil recently found in the Magallanes Territory is stated by experts to be equal in quality to that found in Argentina. The extent of the deposits seems to rival that of the famous fields of Comodoro Rivadavia. Legislation to regulate the well drilling is proposed to prevent inundation of deposits by subterranean streams, to restrict the ownership to native Chilians or foreigners with Chilian families, and to secure to the Government a 10 per cent royalty. A strong flow of petroleum of great purity from a well about 300 feet deep has recently been reported from Chiloé.

Sulphur comes from a largely producing mine at the foot of Mt. Ollague, and from one of growing importance at Tacora on the Arica-La Paz Railway. The deposits of Tacora are believed to contain 10 to 45 million tons of sulphur. In 1915 about 10,000 tons were produced in Chile.

Salt. From various salt deposits, the salinas of Punta de Lobos and several mountain lagoons, about $300,000 worth of salt was produced, supplying the domestic market.

Borax is important, Chile furnishing about half of the world supply.

Agriculture

Of large importance and value are the agricultural interests including fruit, although the imports of such products are nearly double the exports in value. About one eighth of the area of Chile consists of arable land. The production should be greatly increased. Twenty million acres are still available, and with better methods excellent results might be secured. In 1914-15 about 25,000,000 bushels of wheat were raised, half as many potatoes, and more than half as much hay; besides barley, oats, beans, corn, etc. Considerable wheat is exported with some barley, oats, rye, and legumes. Of 15,000,000 acres suitable for wheat, only one fifth is in cultivation. It grows well from Aconcagua to Cautín inclusive, but farther south the crops are uncertain. They average 15-20 bushels an acre. Six hundred thousand acres are devoted to alfalfa, which in favorable places gives three crops a year and has roots ten feet long, a distinctive variety being formed here. In irrigated valleys from Coquimbo north, corn gives two fine crops annually. Potatoes flourish from Concepción south, in Chiloé yielding 250-350 bushels to the acre. Flax and sugar beets might be raised. Some agricultural machines are now employed, in the neighborhood of 30,000.

Fruit. Delicious fruits of all temperate zone varieties and some of the subtropical are raised, chiefly for home consumption, but with export possibilities. Drying and canning of these is practised to some extent, but might be done on a much larger and more profitable scale. Excellent table grapes are raised; many vineyards devote their product to wine making, the industry being especially developed in the Provinces of Santiago, O’Higgins, and Colchagua. In the north, wine is made of the port and sherry classes; in the central section light wines of excellent quality, some of which are exported to the neighboring countries. More wine however is imported of expensive varieties. The vineyards are in general owned by natives, and according to location are worth $200-$1000 an acre. Raisins are produced in quantity.

Forestry

This might become a more important industry, though now practised to a considerable extent. It has been customary to burn a section of forest at the close of summer, February, to get rid of the underbrush, and later to cut down the trees, which must have suffered some injury. The forest area is below the Bio-Bio River. On a tract of 100 square miles extending from near Valdivia north to Temuco, the timber averages about 9000 feet to the acre. Farther south the woods are denser, as on the Island of Chiloé. The greatest extent of forest is in Valdivia, the next in Llanquihue and in Chiloé. On this Island a 60 mile railway was constructed by the Government from Ancud at the northwest to Castro south, on the east side, making a part of the forest accessible. Oak, Chilian mahogany, laurel, ash, pine, and other hard and soft woods are available. There are in Chile 3000 saw-mills and some pulp and shingle mills. The first and second grades of wood, used for floors and finished boards, bring $12-$18 per 1000 feet, ash $25; the third grade is worth $8. Shingles are $3 per thousand. From the forests comes the quillay bark with a soapy substance for cleaning silk and fine linen, of which $200,000 worth is annually exported to France, after being prepared by two Chilian factories. Tannin, of which 15,000 tons are annually used, is derived from bark of several kinds. With additional railways planned and Government data furnished, there is opportunity for good investments with moderate capital.

Stock Raising

Stock raising of various kinds is carried on quite extensively by some large companies under British, German, or Chilian control, often paying 20 per cent dividends. Sheep are in the lead, numbering probably 6,000,000, cattle 3,000,000, horses 725,000, half as many goats, a third as many pigs, fewer donkeys, mules, alpacas, and llamas. The horses are good, larger than those in Peru, and noted for their excellent trotting, some making this as easy as a good pace or canter. In 1916, 20,000,000 pounds of wool were produced, half of this in Magallanes Territory not far from Punta Arenas, where there are more than 3,000,000 sheep. The meat is of the finest quality; the farther south the better the wool in thickness and length of staple.

The cattle are improving with the introduction of Shorthorns and Herefords; there is some export, especially to Bolivia. The 3,000,000 at present might be increased ten fold. A British company is constructing a frigorifico at Puerto Montt. The dairy industry is important, with good cheese, bottled milk, and some condensed. Goats are numerous in the mountains. Apiculture is practised and fine honey is made. Fisheries are of great importance and value, at Juan Fernandez, as also along the coast.

Manufacturing

Such industries are more developed in Chile than in any of the countries previously considered. The 6200 manufactories with 80,000 operatives and an investment of $250,000,000 show great diversity. There are saw mills, flour mills, breweries, sugar refineries, some coarse sugar being imported from Peru, tanneries, furniture, and shoe factories, with others commonly found. A cement factory pays a quarterly dividend of 5 per cent, a brewery gave a semi-annual dividend of 15 per cent. A new one is planned for Arica. More than $12,000,000 are invested in the leather industries, with an output worth $20,000,000. Twenty-two or more shoe factories are scattered in various cities. Clothing and textiles are next in value of production, followed by $10,000,000 worth of furniture and woodwork. Ship building is important.

Investments

Activities in Chile in the immediate future for which about $15,000,000 have been appropriated by the Government include work or equipment on railways, roads, bridges, barracks, waterworks, sewer systems, building construction, and port works. These furnish opportunities to which many others may be added. The possibilities in agriculture, fruit raising and canning are obvious; those in fisheries, saw mills and lumber, development of water power, in factories of various kinds may be noted, as well as for large capitalists in mining. A $10,000,000 contract for the electrification and equipment of four zones of the Government railways has been concluded with a combination of several American interests.