Panama to Patagonia

NITRATE OF SODA AN ALADDIN’S LAMP

Extensive Use of Nitrates as Fertilizers—Enormous Contributions to Chilean Revenues—Résumé of Exportations—Description of the Industry—How the Deposits Lie—Iodine a By-product—Stock of Saltpetre in Reserve—The Trust and Production—Estimates of Ultimate Exhaustion—A Third of a Century More of Prosperous Existence—Shipments not Affected by Panama Canal—Copper a Source of Wealth—Output in Northern Districts—Further Development—Coal—Silver Mines Productive in the Past—Prospect of Future Exploitation.

IS nitrate of soda, the saltpetre of commerce, a national blessing or a national curse?

After the war with Peru and Bolivia, by which Chile added to her territory 1,200 miles of seacoast, including the Bolivian Province of Antofagasta and the Peruvian Province of Tarapacá, a Chilean naval commander was credited with the foreboding prophecy that the nitrates would ruin Chile as they had ruined Peru.

In its political phase the question may be answered according to the bias of the individual. It enters into the subjects concerning which Chileans engage in heated controversies when discussing policies and tendencies, or criticising government expenditures. But this aspect has no direct bearing on the naked economic facts of production and the addition to the nutritious substances of the world’s soil.

Nitrates are among the most extensively used fertilizers known to agriculture, and the demand for them grows. Their relation to the fiscal system of Chile may be understood when it is known that from 85 to 87 per cent of the total revenues is derived from the export tax on the saltpetre products. This impost is, in terms of English currency, at the rate of 28 pence per 46 kilograms or Spanish quintal of 101.4 pounds, relatively 55 cents for each 100 pounds. Their ratio of contribution to the national wealth is shown by an analysis for a given year, when the total value of the exports was $73,786,000 gold, of which $53,565,000 was nitrates and the by-product of iodine, while the balance of $20,221,000 was composed of mineral and agricultural products and manufactured articles. In Chilean currency the figures were $202,153,000, of which the nitrates constituted $146,756,000. In the last quarter of a century the nitrate beds have yielded to the Chilean government $273,000,000 gold, and it is estimated that during the next twenty-five years, on the basis of the present export tax, the revenue will amount to $436,000,000.

The first exportations were made in 1832. They continued on a small scale until the war in which Peru lost the Province of Tarapacá, and their exploitation on a large scale may be said to have begun in 1882 under the Chilean administration. In that year the exportations amounted to 10,701,000 Spanish quintals. In the period inclusive from 1832 to 1904 the total reached the enormous sum of 602,438,000 quintals, or 61,087,213,200 pounds, equal to 27,271,077 long tons of 2,240 pounds. The personal histories of the individuals who engaged in the exploitation of the saltpetre deposits are as romantic as the experiences of the bonanza mining-kings. Nitrate kings have risen and thriven and have held their courts with titled courtiers in their train. Colossal fortunes have been made and plain commoners have become peers of England treading the golden path which was paved with saltpetre.

So little is known about the nitrate industry that I venture to repeat the substance of a description which I found at once entertaining and instructive.[11]

The saltpetre or nitrate zone embraces the extension comprehended between the Camarones in south latitude 19° 11′ on the north and parallel 27° to the port of Caldera on the south, 450 miles in length. The distance which separates it from the coast varies. In the northern part the sea is only 15 miles away; in the South it is 93 miles distant.

The deposits of saltpetre situated in the Province of Tarapacá occupy the small folds and the gently rising hills which extend from the west of the pampas of Tamarugal. To the south of the Loa River these deposits follow no lode, and they are met with in the midst of the great pampas as well as in the folds of some hills. But they extend always in a zone which runs to a distance varying from 37 to 93 miles from the coast. The short space that separates them from the sea makes easy the access to the neighboring ports by means of the railroads through the ravines which traverse the Cordillera of the coast.

The saltpetre is found mixed with other substances and forming an irregular layer, frequently broken up into barren parts, in which generally common salt dominates, or simply a conglomeration of clay, gravel, and sulphate of soda.

The layer or covering which contains the nitrate is encountered at a very slight depth, covered by a fold of the conglomeration indicated, and which in general is altogether sterile, though in some parts, principally in the North, it contains a regular vein of nitrate.

The vein of nitrate of soda in the layer which contains it is quite variable, the highest proportion being in the Province of Tarapacá, where in some points the medium quality amounts to 60 per cent. In the southern region this quality of caliche, or crude material, diminishes, and does not exceed an average of 30 per cent.

The name caliche is given to the raw material which contains the saltpetre that is found in the beds of deposits mixed with common salt, sulphate of soda, clay, and other foreign substances. The thickness of the layer is decidedly variable, and fluctuates between a few inches and three feet. Deposits of greater thickness exist, but these never have a great extension.

The height above sea-level at which these deposits are met with varies from 3,600 to 13,000 feet.

The layers composing a saltpetre deposit are:

1st. Chuca.—This is formed by clay mixed with earth very fine and evenly spread. The thickness of the chuca generally does not exceed an inch and a quarter.

2d. Costra.—This layer, which forms the immediate covering for the caliche, has a thickness fluctuating between four-fifths of an inch and several feet.

3d. Caliche.—This is the layer which contains the saltpetre, and its thickness varies greatly in different places.

4th. Conjelo and cova.—This is the last layer, which rests upon the rock. It is formed by a mixture of common salt, various sulphates, and other salts, but contains no saltpetre. Its thickness is also very variable.

The limpid caliche is taken to the finishing establishments, where it is submitted to a process of purification which is founded on the great solubility of nitrate of soda, superior to the other salts which are in combination with it, in water heated to the boiling-point. The solutions which result are carried by means of troughs to great vats, where the nitrate of soda crystallizes along with the potash, which exists in small quantity together with a little common salt and a small amount of sulphates and impurities.

The quality of the saltpetre thus crystallized is 95 per cent of nitrate of soda, and it is known by the name of ordinary or current saltpetre. Refined saltpetre of the grade of 96 per cent is also obtained by submitting the warm solutions to a light and short decantation, by which there is left a part of the salt and the impurities. The refined product is passed immediately to the crystallizing vats. For this process powerful machinery is used which can refine 1,000,000 pounds of saltpetre daily. The residue of the nitrate of soda is known by the name of ripio. Its percentage of saltpetre is estimated below 15.

The saltpetre zone is served with railways. These leave the various ports and ascend to a height of 4,000 feet above sea-level, with the exception of those of Caleta Buena and Junin, which stretch from the summits of the neighboring Cordillera to the sea and are united with the ports by means of automotors. The automotor plano of Junin has a vertical height of 2,145 feet, and those of Caleta Buena 2,430 feet.

The Granja or Challorcollo road traverses the pampas of Tamlugal, and reaches the foot of the hill of Challorcollo. From this point there is a hanging railway, which reaches the mines in the summit of the hill at a height of 4,600 feet and is two miles long.

An important factor in the production of nitrates is coal, which is used in large quantities, the consumption being not less than 400,000 tons annually. The prices fluctuate from 22 to 28 shillings per ton. Generally English coal or that from Australia is used. Chilean coal is not employed to any extent. The home production is hardly sufficient for the needs of the railroads and the industries in the southern part of the country. Besides, the ships which carry the nitrates to foreign ports return with coal as the cargo. The freight rates to Europe for the nitrates vary from 20 to 30 shillings per ton.

In all the deposits iodine is found formed of salts with the base of soda. The salts of iodine dissolve along with the nitrate of soda, and later are extracted from the mother waters which have remained after the crystallization of the saltpetre. The process is simple and cheap, and the iodine is obtained in the metallic state and perfectly pure, in which condition it is a commercial commodity.

The small consumption of iodine in the industry has caused the producers of the entire world to form a combination to limit the production and fix its relation to consumption. The agreement obliges all the saltpetre establishments of each country to withdraw only a very small part of the iodine which their properties contain. At some future period the refuse of the saltpetre will be worked to extract the iodine.

The annual production of iodine is approximately 4,200 Spanish quintals. The price of the substance is about 5½ pence per troy ounce. The total export tax varies from $150,000 to $100,000.

To the east of the ports of Punta de Lobos and of Hurmillos is a great salt field extending over an area of 32,000 hectares, or 80,000 acres. It is covered with common salt, or chloride of sodium. The salt is perfectly pure and crystallized. The analyses have given 99.99 per cent of chloride of sodium. The thickness of this salt layer is not known. The deepest wells have reached 82 feet. In a recent year 220,000 quintals were exported to the interior of the country. The good quality of this salt allows it to be used in every class of industry and also for domestic purposes. Besides the great salt bed named, there are various others, but these are not so important.

The number of laborers employed in the nitrate industry varies from 20,000 to 25,000 according to the activity of the season. Production in some years has been curtailed through the scarcity of labor or through strikes and similar causes.

The principal application of saltpetre is in agriculture, it being employed as manure for land worn out by many years of continuous cultivation. Some crops give 25 per cent to 30 per cent more than those which are raised without fertilizing the ground with nitrates. In special cases the returns have been much larger, and it is on this account that this fertilizer has obtained so considerable an increase in all markets.

The stock of saltpetre was calculated for the entire nitrate zone as of January 1, 1900, approximately as follows:

To this calculation should be added the nitrates which may exist in the pampas without having been discovered up to this time both in Tarapacá and in the districts of the South. In Tarapacá are the pampas of Orcoma, in which have been found layers of saltpetre of low grade, but which later may prove worth developing, though not while deposits of greater importance exist and while the present prices are maintained.

There are also deposits of saltpetre to the north of Pisagua in the pampas of Tacna, but in small quantity and in isolated beds.

Deducting the output from the time the calculation was made to 1905, the total would be 951,754,000 quintals then untouched. The nitrate fields which have not been reconnoitred have been estimated at 500,000,000 quintals, but that is rather a guess than a calculation. A safer assumption would be 300,000,000 quintals. The Antofagasta district has come up to expectations. Approximately, then, it may be said that in 1905 Chile had a nitrate reserve of a billion and a quarter (1,250,000,000) quintals of fertilizing material for the world’s needs. That is a prodigious quantity, but not an inexhaustible one. In the eleven years from 1894 to 1904 inclusive the exports increased at an average rate of 1,000,000 quintals annually. They were 23,947,000 in 1894; in 1904, 32,387,000 quintals.

The industry is in every sense a modern one, for it is controlled by a combination, or trust. This arrangement has one good feature: it insures reliable statistical data. The prospect as to production may be readily grasped when the explanation is made that the output for the year which ended with the first quarter of 1905 was placed at 36,000,000 Spanish quintals as against 32,387,000 the previous year. This means a direct revenue of $20,000,000 gold as long as the rate of production is maintained. A lowering of prices might cause the output to be lessened a few million pounds, but the world’s demand is steady enough to assume that for the present period these figures may stand substantially without change.

In the entire nitrate zone there are about 100 oficinas, or clarifying establishments. The original combination of the producers, or trust, was for five years, and began March 31, 1901. The amount of saltpetre which the oficinas may produce is fixed annually by a directorate. The exportation cannot be less than the previous year’s consumption.

If the rate of production fixed by the combination during recent years should be maintained without further change, there would remain 33 to 35 years more of nitrate exploitation on the present scale. Nothing, however, is more improbable. The product will be increased as rapidly as good prices can be obtained, and the experience of the last ten years has shown that the consumption grows fast enough to justify the larger output. No combination of producers can keep new capital from coming into the nitrate fields, for no vague fear of the future will be strong enough to cause the government to withdraw from rental for an indefinite period its nitrate properties. The new capital wants quick returns on the investment. It urges advertising, spending more money in the propaganda maintained to educate the world in the value of saltpetre as a fertilizer.

Against constant pressure for widening the market may come competition from artificial products, or new discoveries of nitrate fields in the desert of Sahara or in California that will terminate the monopoly of production and cause the export tax to be lowered. But while the profits might be lessened from some such cause, it does not follow that the production would be curtailed. It would the more likely be swollen. Expert opinion is that the existing oficinas could double their output. The profit which now accrues from an annual production of 35,000,000 or 36,000,000 quintals could be spread over 50,000,000 quintals and still show a margin of gain. Thus in any view the quantity of saltpetre extracted is likely to grow with each year, subject only to temporary checks or fluctuations.

Studied in every light, Chile’s Aladdin’s lamp flickers, for the life of the nitrate industry as a national wealth producer draws to a close. A third of a century to forty years reasonably may be fixed as the term of its existence. After that will remain the debris of the industry, and possibly before the beds approach exhaustion, irrigation will make the dead pampas blossom with the luxuriance of tropical agriculture, and the present sparse and artificially sustained population will be supplanted by populous farming communities.

In the opening chapter I have stated that the Panama Canal in its ultimate economic influence will not affect the nitrates or be affected by them, because their life is limited to the infancy of the waterway, while, during the period of their existence that may remain after it is opened to traffic, the bulky nature of the cargo which must pay the tolls counteracts the possible shortening of the distance. It may develop that other commercial considerations will cause some diversion of the nitrate carrying-trade through the Canal, but this will be chiefly for the gulf ports and the Atlantic coast of the United States. It is not likely to become important, since the market for saltpetre fertilizers is mainly in Europe. England takes directly and for the Continent between 7,000,000 and 8,000,000 quintals annually, Germany about 1,000,000 more, and France 5,000,000 quintals. Other European countries import from 500,000 up to 2,000,000 quintals. The east coast of the United States imports 5,000,000 quintals, or not more than 15 to 20 per cent of the total production, though the consumption is a growing one and is stimulated by systematic advertising. This proportion may increase without materially lessening the cargoes of nitrates which will be transported through the Straits or around Cape Horn to Liverpool, Hamburg, and Havre.

After the nitrates, copper is the most productive source of mineral wealth, and is the most important element in metal mining. The output ranges from 30,000 to 35,000 tons each year. The heaviest output is in the northern region, where the outlet is through the ports of Coquimbo and Antofagasta, but the single district of Lota in the South has a larger output than either of them. It contributes from 7,000 tons upward in bars and ingots. The Guayacan mines in the Department of Ovalle have a similar output. In the district of Chuquicamata, which is in the volcanic Cordilleras, 160 miles from Antofagasta by the railway and 9,000 feet above sea-level, are half a dozen copper mines producing 18,000 to 20,000 tons of ore which averages 18 per cent. The area is 8 square miles of country rock of pure granite with true fissure lodes, and it is estimated that there are 15,000,000 tons of decomposed rock averaging one-half of 1 per cent of copper. In the Capopo district are a group of copper mines which have a monthly output of 2,500 or 2,600 tons of ore, the sulphides predominating in most of them.

The copper industry of Chile has been a reasonably profitable and steady one, and without doubt it is capable of a considerable expansion by the application of modern methods and the more general adoption of improved machinery. The bulk of the shipments is in the form of fine bar copper, though both regulus and copper ores are exported.

The coal mines are located in the Provinces of Concepcion and Arauco, the most productive veins being at Lota and Coronel. This is utilized on the railways and in local industries as well as in coaling vessels, but the output does not equal the demand, and Chile may be looked upon as an importer of coal for an indefinite period. There is lignite to the south toward the Straits, but its commercial value has not been demonstrated.

Iron ore has been found in the Province of Coquimbo and elsewhere, but the production is light. The government made valuable concessions to a French company which agreed to establish an iron industry in Valdivia.

The gold that exists in the North, where the lodes are quartz, and the lavaderos, or washings, in the alluvial soil of Tierra del Fuego are not likely to become important sources of national wealth, though new discoveries which prove worth working are reported from time to time.

In times past, Chilean silver mines have been quite productive. The most famous were the Chanarcillo and Chimbote in the Copiapo district, which a few years ago were declared to be worked out. A group in the Iquique region includes the mineral section of Huantayaja. The total output from this group during the ten years preceding 1892 was placed at $22,000,000. After that the production decreased, though it was said to average $400,000 annually. The depth of workings in these mines varies from 200 to 2,000 feet. The general character of the ore is chlorides, and the formation of the rock is porphyritic and calcareous. White silver about 95 per cent pure and the very rich ores are found in pockets near the contact of the calcareous porphyritic rocks. Near these mines is the mineral section of Santa Rosa which includes the Consequencia and the Pansio. The latter is said to have produced $1,600,000 during the last ten years.

In the Province of Antofagasta are the two silver districts known as Caracoles and Inca Caracoles. The former is 110 miles from the coast. These mines were discovered so recently as 1869. The lodes were of extraordinary richness. The ores were chiefly chlorides, iodides, and mixtures of chlorides and sulphides. The ore deposits were superficial, and the ore generally was found in pockets. The shafts were from 300 to 600 feet deep, though one of them had a depth of 2,500 feet. Deep mining was abandoned, as it was shown that the veins split up into small fissures. The output of the Caracoles group was estimated at 60,000,000 ounces of fine silver up to the time when the mines were practically abandoned. At present the output is said not to exceed a few thousand ounces.

The Inca Caracoles mines are situated near the town of Calama, 150 miles from the port of Antofagasta. The country rock is porphyry, and the lodes range from 3 to 6 feet in width. The ore is chiefly chloride, and averages 40 ounces to the ton. Heavy freights and the absence of water have prevented the development of this group, and the prospective output cannot be accurately estimated. However, it seems to have great possibilities.

Neither copper nor silver ever will suffice to make up the deficiency in the national wealth caused by the gradual exhaustion of the nitrate beds, yet increased transportation facilities and the application of the newer processes give promise of a revival of the mineral industry and an appreciable addition to the productive resources of the country.