CHAPTER VII

MINING

_The Nitrate Industry.—Copper.—Iron.—Gold and Silver.—Coal.—Petroleum.—Borax, Sulphur, Manganese, etc._

International agriculturists did not begin to call for nitrate of soda until the scientific study of soils was seriously attempted and experiments demonstrated the value of this chemical as a crop fertiliser. Young countries may produce grain and fruits from soil that is almost untended, but some soils of special characteristics, and old lands cultivated for two or three thousand years, respond gratefully to the stimulus offered by supplies of nitrogen, phosphate and potash. From the time that this axiom was accepted, the West Coast of South America began to ship the product of her unique deposits overseas in big quantities.

But the nitrate pampas had been known for what they were for several hundred years before the industrial boom of the late nineteenth century; small amounts were used throughout the Spanish colonial period. This employment was confined to the manufacture of fireworks and gunpowder, some of the deposits remaining in the hands of the Viceregal Government and others being operated by Jesuits and other religious orders. The Government chiefly used the “saltpetre” in making gunpowder for firearms, and for blasting purposes in mines of precious metals; as, for example, in the silver mines of Huantajaya, some fifteen miles inland from Iquique. Early voyagers upon the coast noted that the gunpowder of Peru was better than that made in other parts of the colonies, and penalties were inflicted to prevent the illegal extraction of nitrate by unauthorised persons. Juan and Ulloa, writing in 1741, speak of the contraband gunpowder manufacture carried on near the _salitre_ (nitrate of soda) field of Guancarama, and the efforts of the Lima treasury to stop similar use being made of the beds near Zayla. The good fathers of the religious missions had another destination for the explosive; it was used to make the immense quantity of fireworks burnt at times of festival, a custom that is not yet extinct in Spanish America.

A simple method of obtaining the nitrate of sodium from the rocky beds of mixed composition (the _caliche_) was employed by these early manufacturers, who used chiefly Indian workers. The whitish, hard substance was broken up into small pieces and thrown into huge copper cauldrons filled with boiling water. When the caliche was dissolved the liquor was dipped off with enormous spoons into first one and then another vat, and there it crystallised.

Exactly the same principle is the basis of the modern method. The caliche yields to dynamite charges, successor of the pickaxe; is brought to the nitrate plant (_oficina_), in wagons instead of being laboriously carried on the backs of Indians; the copper cauldron is replaced by a large tank, and coils containing steam at a high temperature are passed through the water; the liquor is drawn off by pipes at a carefully considered moment, and the final drying process takes place upon prepared cement floors; coal or oil fuel is used instead of wood. There is less waste of material today and the quantities produced are immense: but the ancient empirical nitrate extractors were not very far wrong as regards system.

After independence from Spain, small sales of nitrate to foreign countries commenced, for the manufacture of nitric acid; 800 tons were exported in 1830, but in the four-year period between 1840 and 1844 an average of 15,000 tons was maintained. Shipments rose steadily after the introduction of new methods in 1855, when steam was first used in the dissolving process and the construction of vats was changed from the system of 1812. By the year 1869 nitrate exports had risen to about 115,000 tons a year; in 1873 the figures reached over 285,000 tons; in 1876, to more than 320,000 tons.

After the War of the Pacific left Chile with the Bolivian fields of Antofagasta and the Peruvian beds of Tarapacá in her hands, a tremendous impetus was given to the nitrate industry. Great amounts of foreign capital were brought in, railways and ports constructed. Production rose steadily. In 1884 the export stood at some 480,000 tons; in 1888, about 750,000, while the million mark was passed two years later. The industry suffered from uncertainties at the time of the Balmaceda revolution, when the insurgent leaders held the north, obtaining revenues and preparing armies upon this vantage ground; but after the collapse of the Balmacedistas in 1891 foreign trade was revived, and at the end of the century nitrate shipments had reached about 1,500,000 tons.

[Illustration: The Nitrate Pampa: Opening up Trench after Blasting.]

[Illustration: General View of Nitrate and Iodine Plant.]

In 1908 the export amounted to more than 2,000,000 tons, increasing considerably after this time on account of the heavy buying of the European Central Powers, Germany and Austria taking together an average of 1,000,000 tons each year between 1909 and 1914. The position of nitrate in Chile’s economic life is illustrated by export figures for the last “normal” year, 1913. Total export values, 391,000,000 pesos: of this nitrate and iodine represented 311,000,000 pesos. Nitrate responded to war demands, after the first paralysis of shipping had passed, and in 1916 nearly 3,000,000 tons were exported for munitions manufacture to the Allies and the United States. The greatest purchasers of Chilean nitrate today are European and North American agricultural countries; Australia also finds this chemical of great value and, before the war, regularly exchanged it for coal cargoes.

South America herself probably presents the most extensive stretches of agricultural territory which make practically no use of nitrate. In Chile its use is almost non-existent, partly because the soil is too newly opened and rich to need a stimulus as yet, and partly because the moist southerly regions are considered unsuitable for the employment of the easily soluble salitre. Guano is the most popular fertiliser in Chile, especially in the north: its use follows old Inca custom, when such valleys as that of Arica were irrigated and fertilised to produce famous crops of maize, _aji_ and cotton.

_The Nitrate Pampas_

No stranger country than that of the wide, golden-pink pampas where nitrate lies is to be found in the Americas. The circumstances that created the deposits, the rainless climate that preserved them for unknown centuries, are unparalleled; the belt upon the Chilean West Coast between 19° and 26° of south latitude contains the world’s sole source of naturally produced nitrate of soda. It is a unique region, and although the science of production of atmospheric nitrate advanced during the war, producers of the Chilean chemical do not view this competitor with alarm. Artificial processes are expensive; Chile can, if necessary, lower nitrate prices to meet any rival.

The coastal border of the great nitrate belt is about 450 miles in extent, its tawny dunes displaying no tree nor smallest green thing except in such rare spots as where a thread of water survives the burning sun and sand, or where, at a port, an artificial garden has been created with piped water. The generally waterless state of the region has long reduced it to sterility. None of the nitrate deposits lie upon the coast, or at a distance of less than fifteen miles inland. The average distance of the westerly margin of the deposits from the sea is about 45 miles, a few of the beds, however, lying as far as 100 miles inland. Between the salitre fields and the Pacific Ocean runs the diminished coastal range, dwindling here and there to nothing more than a straggling series of broken, rounded hillocks; to the east the deposits are guarded by the backbone of the Andes. The general altitude of the beds above sea level is from 2000 to 5000 feet.

The whole extent of the treeless and practically waterless country of North Chile, presenting a broad and tawny face to the unchanging blue sky, is a vast series of mineral deposits, for not only nitrate of sodium but also copper, borax, gypsum, cobalt, manganese, silver, and gold are spread through the great areas comprising the present provinces of Antofagasta, Tarapacá, Tacna and Atacama. Some of these minerals have been worked for centuries, but whatever small and more or less isolated deposits of nitrate exist in the two last-named regions remain unexploited: commercial production of the mineral is confined to the two great rich provinces of Tarapacá and Antofagasta.

The salitre beds vary in thickness and are of capricious distribution: great areas within the rainless region show no trace of these deposits, while in others the layers run twenty feet thick. The surveyed fields cover at least 225,000 acres, contained chiefly in five major districts. The most northerly, the Pampa of Tarapacá, ships its products from the ports of Iquique, Caleta Buena, Patillos, Junin and Pisagua, and is served by three railways—the Nitrate Railways Company, the Agua Santa Nitrate and Railway Company, and the Junin Railway Company. Next comes the Pampa of Toco, exporting through the coast town of Tocopilla, to which it is joined by the Anglo-Chilean Nitrate and Railway Company. Farther south lies the enormous Pampa of Antofagasta, with outlets at the fine port town of Antofagasta and its older rival, Mejillones; the region is served by the main line and branches of the Antofagasta and Bolivia Railway Company. The fourth field in order is the Aguas Blancas Pampa, with a shipping point at Caleta Coloso, reached by an arm of the Antofagasta and Bolivia Railway; and the most southerly deposit of considerable size is the Pampa of Taltal, shipping its product by the Taltal Railway to Taltal Port. A few isolated beds lie outside the areas of these five great deposits, as the Providencia and Boquete beds of Antofagasta, but so far as present surveys have proved their existence, the great masses of nitrate are definitely localised.

Tarapacá, with 76 oficinas equipped, normally produces about 40 per cent of the total nitrate exported from Chile; Antofagasta, with 30 oficinas, chiefly of a more modern type, produces about 35 per cent; Taltal, with 9 oficinas, ships usually some 10 per cent of the total; Tocopilla, with 7 oficinas, about 9 per cent; and Aguas Blancas, with another 7 oficinas, is responsible for 6 per cent.

_Nitrate Companies_

The total capital invested in nitrate lands and plants is calculated at 400,000,000 Chilean gold pesos of eighteen pence, or about £38,000,000 sterling. It is not easy to state exactly what proportion of this total should be assigned to each of the different groups of nationals owning these properties, since many firms employing foreign capital are registered as Chilean companies, and both during and since the war a considerable number of oficinas have changed hands; but the official statistics published by the Chilean Government give the percentage of production ascribed to the various groups of owners, thus offering a useful guide.

The figures ascribe to Chilean owners, out of a total 129 plants in operation in 1918, 60 oficinas, producing 50 per cent of the nitrate total; to English companies, 43 oficinas and 34 per cent of the production; to the Jugo-Slavs, with 7 oficinas, about 6 per cent of the production; Peruvians, 7 oficinas, 3 per cent of production; Spaniards, with 3 oficinas, less than 2 per cent of the total output; Americans, 2 oficinas, nearly 3 per cent; Germans, with 2 oficinas, less than 1 per cent of production—this reduction from a larger pre-war production being due to closure of several properties from 1914 onwards.

The Chilean companies include the largest and most heavily capitalised in the country, one of these, the Compañia de Salitres de Antofagasta, producing 10 per cent of Chile’s total output. The firm owns seven oficinas, employs 15,000 men, does a large general import and export business, owns its own fleet of barges and tugs, and possesses a belt of nitrate lands on the Antofagasta Pampa twenty miles long. In 1918 the company, capitalised at 16,000,000 pesos (Chilean paper), earned profits of over 22,000,000 pesos or over £1,000,000 sterling at the prevailing exchange, and was thus able to set aside a substantial sum for rainy days. It is on account of earnings such as these, supplemented by the fantastically huge sums earned in the summer of 1920 when the price of nitrate rose to seventeen shillings per quintal, that the nitrate companies were able to observe with a semblance of equanimity the subsequent and sustained fall in prices. The international merchants were badly hit when the slump of 1921 came, but companies in Chile had made so much money that it was preferable in many cases to shut down operations rather than to continue the production of unwanted goods.

Other big Chilean firms are the Cia. Salitrera “El Loa,” operating seven works, all in Antofagasta Province; the Cia. Salitrera Lastenia, with three fine properties upon the same pampa; and the Cia. de Salitres y Ferrocarril de Agua Santa, operating six oficinas on the Tarapacá Pampa.

Of the English companies, the largest was the Alianza, operating three oficinas in Tarapacá, and exporting normally about 150,000 tons annually, but this company has changed its domicile to Valparaiso and now counts with the Chilean group. The Anglo-Chilean Company has three oficinas in the Tocopilla district; the Lautaro, three, on the Taltal Pampa; the Liverpool Nitrate Company, three, in Tarapacá; the Amelia, three, in Tarapacá and Antofagasta; the Fortuna, three, in Antofagasta; the Rosario, three in Tarapacá; the New Tamarugal, two, in Tarapacá, where the two nitrate works of the London Nitrate Company and the properties of the Lagunas companies are also situated.

The German oficinas are twelve in number, operated by four companies. Of these the most important is the Cia. Salitrera de Tocopilla, formerly the Compañia H. B. Sloman, with four properties on the Pampa of Toco. The Cia. Salitrera Alemana owns five oficinas, all situated on the Taltal Pampa; Salpeterwerke Gildemeister A. G., has three works in Tarapacá, and the Salpeterwerke Augusta Victoria A. G., one oficina, in Antofagasta. The well-known Italian firm of Pedro Perfetti owns five oficinas in Taltal.

The nationals who most notably increased their interest in nitrate properties during and immediately after the war were the enterprising Jugo-Slavs who have of late years taken a considerable part in Chilean development work. The largest of the Jugo-Slav firms is that of Baburizza Lukinovic, with five well-equipped oficinas in the Antofagasta district. Several other European-owned oficinas passed into Slavic hands before the stagnation of the market set in.

Two North American firms own nitrate oficinas. The Dupont Nitrate Company operates two properties in Taltal from which about 30,000 tons are annually shipped, but since all this product goes directly to the Dupont explosives works in the United States, the market is not interested in the output. W. R. Grace and Company, doing a general export and import trade and employing their own steamers, operate nitrate works in Tarapacá, with a production of about 45,000 tons.

A few years ago pessimists prophesied that the Chilean nitrate fields would be exhausted by the year 1923. Careful examinations carried out by the national authorities as well as by individual companies have definitely allayed any fear of this kind. Surveys made under the auspices of the Chilean Government by the distinguished engineer Francisco Castillo showed that nitrate fields properly tested, owned and in operation, cover some 2244 square miles, while outside that area there are at least 75,000 square miles of undeveloped nitrate-bearing lands—chiefly in the hands of the Government of Chile. With, thus, over 95 per cent of the deposits untouched it is reasonable to expect a long life for this industry.

From the fields of Tarapacá and Antofagasta 60,000,000 tons of the chemical have been taken since the beginning of overseas exports, and it is estimated that in the comparatively small surveyed and operating area there are about 240,000,000 tons in sight, a quantity sufficient to fill the world’s needs for at least another century at the present rate of supply. This is without taking into consideration the huge body of less readily accessible nitrate lands referred to in Dr. Castillo’s conservative report, which included no deposits containing less than 17 per cent of nitrate, nor layers of less than twelve inches in thickness unless exceptionally rich.

_The Caliche_

Into the highly controversial question of the origin of the nitrate-bearing deposits it is unprofitable to go deeply, since, as in the case of petroleum, scientists have not agreed upon a theory. Several have been put forward, and a good deal of study and research has been devoted to the problem, but with no final result, a definite objection tripping up even the most likely suggestions. The most generally supported theory is that which was expounded in its original form by Darwin, postulating the long submergence of this part of the West Coast under the sea, its gradual rise through volcanic action, and the slow drainage and drying of masses upheaved from the Pacific floor. Remains of shell-fish are occasionally found imbedded in the caliche, and the presence of iodine is also adduced as contributory evidence; but bromine is curiously absent, and the question is complicated by other geological displays, some of which certainly seem to prove that before the subsidence of this belt in the Pacific the land was high and dry, clothed with thick forests.

I listened once upon a burning afternoon in the nitrate pampas to the seriously held theory that the caliche drained down, under the soil, from the mountains, and that the particular beds upon which my good friend was operating owed their origin to Lake Poopó, a turquoise gem near the railway line leading to Bolivia; the beds, it was insisted, seeped slowly from the lake and were being pushed up from underneath by subterranean pressure. Another theory credits the volcanos of the Andes with the production of sufficient ammoniated steam to create chemical changes upon the pampas; others suggest the union of oxygen and nitrogen in the air during electric storms, forming nitric acid which, in contact with lime, might produce nitrate of lime; this, if coming into touch with sulphate of soda, might form nitrate of soda, releasing the sulphate of lime.

He who prefers a less technical theory may agree that nitrogen deposits are derived from the guano of sea-birds, found along the Pacific coast.

The terminology of the nitrate pampas is a proof of its old recognition. The _chuca_ is the loose, often friable, decomposed top layer, from two to twelve inches thick. Below it comes the _costra_, a hard, rocky agglomeration of cemented clay, porphyry and feldspar amalgamated with sulphates of calcium, potash and soda, often also containing traces of nitrate of soda and common salt. Third comes the _tapa_, the immediate shield of the nitrate of soda beds, composed of fragments of nitrate, of salt, sand and clay. These three layers form mattresses from a few inches to three or even six feet in depth, and owing to the hardness of the costra must be blasted away from the precious fourth layer, the _caliche_ proper.

The caliche bed varies remarkably in thickness and in position, sometimes offering a thin, sand-mixed, layer of little value, and at other times revealing itself as a beautiful shining snow-white bed several feet in thickness; its hue varies from pure white to grey, sandy, and even violet, and its consistency may be sometimes loose and porous, while in other regions it is as hard as marble. The best caliche contains as much as 70 per cent of nitrate, and by the present methods of extraction it is not considered worth while to operate deposits containing less than 14 to 15 per cent. The average in Tarapacá and Antofagasta runs to about 20 per cent. Below the caliche is the _conjelo_, another fairly loose layer of sand and clay, salts, selenite crystals and traces of nitrate; still farther down is another plainly differentiated stratum, called the _coba_, with a comparatively high percentage of water, a heavy proportion of clay, calcium sulphate, and other minor components. The nitrate is often carried through several of the protecting layers, and foreign matter is frequently found mixed with the caliche, yet the different strata almost invariably exist in readily distinguishable and undisturbed beds.

The process of preparation for the market is simple. The caliche, thoroughly crushed by heavy machinery, is tipped into immense tanks and covered with water: coils of pipes fixed in these vats heat the mass to a high temperature and the nitrate of sodium, readily soluble in boiling water, dissolves. The other ingredients of the caliche fortunately are not so easily dissolved, and settle to the bottom of the tanks, so that when the water is drawn off and cooled the nitrate crystallises in a high grade of purity. There is a moment to be watched for in drawing off the liquor, however; common salt (sodium chloride) is frequently present in the caliche in unwanted quantities, dissolving with the same readiness as the nitrate. But it begins to precipitate before the nitrate, and the right time for withdrawing the liquor is when the salt has settled and the nitrate is immediately following it. The nitrate-charged water crystallises on the floor and sides of the shallow _bateas_ (vats, generally of wood) into which it is passed, the process of cooling and crystallisation taking from 20 to 40 hours. The liquor is then pumped away, part being used for the manufacture of iodine according to the amount permitted to the oficina by the central Association, while the nitrate crystals are gathered in large pans for a few days for draining, and afterwards spread upon the cemented open planes, the _canchas_, for two weeks until thoroughly dry; it is then ready for bagging. It is during the drying stage on the cancha that nitrate in large quantities, all over the pampas, would be spoiled by dissolution if heavy rain should fall—a phenomenon of such rare and unlikely occurrence that it is not taken into consideration. The belt is not absolutely rainless, Iquique claiming a rainfall of half an inch per annum, while the Antofagasta Pampa has received showers four times in the last fifteen years; heavy fogs, too, not infrequently invade the pampas. But it would take a series of terrific deluges for moisture to filter through the protecting crusts above the caliche, and this sometimes suggested danger is not in sight.

The “commercial standard” of purity which exported nitrate must attain for sales to agricultural regions is 95 per cent, but 96 per cent and over is reached in shipments destined to explosives factories. The cost of production of necessity fluctuates with the prices paid for wages, fuel and equipment, but was reckoned by Dr. Enrique Cuevas, in 1916, to work out at a minimum of two shillings, or fifty American cents, for each Spanish quintal of 101 pounds weight. During 1921 the cost was reckoned at double this amount. Expenses tend to increase year by year, with higher wages and costs of food and fuel, as well as new charges such as that recently added by the Employers’ Liability Laws of Chile. Antofagasta reckons that the cost of living increased 300 per cent between the middle of 1914 and the middle of 1921: it is certainly no less upon the inland nitrate fields, where all merchandise has an extra rail journey, every gallon of water is piped long distances from the mountains, and it is common to bring cattle for slaughter overland from northwest Argentina, the animals being shod for the three or four weeks’ march over rough trails. The only method of reducing costs is by improved scientific production, and to this aim the work of the best companies is constantly and successfully directed.

Iodine is extracted from the “mother liquor” that has already deposited its burden of nitrate of soda and of common salt, and which is, after the extraction of iodine, returned to the first lixiviation tanks to serve again in dissolution of new loads of the raw caliche. The purple-black iodine crystals, of so pungent a quality that a whiff from the store-room is almost blinding, are packed into strong little wooden casks for export. A couple of big oficinas could, between them, manufacture enough iodine in a year to supply the world’s needs, but to prevent glutting of the market there is an agreement with the Producers’ Association by which the amount of this chemical made by each nitrate plant is strictly regulated.

_A Desert Industry_

Before the realization of the properties of nitrate and its commercial exploitation upon a great scale, the burning pampas of Tarapacá and Antofagasta were solitudes, shunned by all animal life. This region, whose products were destined to give new life to a million cultivated fields, to bring orchards and groves all over the world into magnificent flower and fruit, lacked the ability to produce so much as a blade of grass. Forming a continuous stretch of arid country with the long deserts north of Copiapó, the major part of this strip shelters no life that has not been artificially introduced.

Yet today this region presents the liveliest scenes of the West Coast. Where a solitary waste lay under the sun, railways cross the desert with loads of heavy bags of chemicals; tall chimneys rise into the quivering air, the grey tin roofs of the nitrate works dot the pampas thickly. Each nitrate plant is the centre of an artificial town, to which every drop of water must be piped, every article of clothing, food, every scrap of wood and metal needed for dwellings and oficina must be carried. The ground is pitted with the marks of the _tiros_, the test blastings made in all directions to discover the quality and position of the nitrate stratum; and one may stand upon any small rise in the richest nitrate pampas and count a dozen or more of the long flat “dumps” of waste material that denote the active working of an oficina.

The scene appears to have no elements of beauty, for there is no hue but that of the sandy desert, the grey and black of the oficinas and the gleam of railway tracks; the outlines of the scored and pitted ground, the railway cars, the smoking chimneys, are harsh. Yet there is a sense of energy and prosperity, of intelligent activity, and in the pure dry air of the pampa almost everyone experiences a feeling of splendid health and well-being.

Above the flat desert is an enormous bowl of clear, transparent sky and one looks far away to distances that seem endless. At sunrise and sunset the effects of light upon the sky and pampa are of a beauty never seen but in expanses such as these. I have watched the sky in an Antofagasta nitrate pampa when, as the sun fell swiftly, all the arch flushed with rose, and quickly flooded with sheets of purest violet while the orange and umber pampa took on deep amethyst shadows; before pastel or paint could record the sight, all the sky was transformed in a clear luminous lemon-yellow, upon whose bright surface streams of translucent green presently ran. The high peaks of far-distant Andes appeared as if floating, the snow-crowned heads of San Pedro and San Pablo alone visible against the changing sky, fading at last into the mantle of sapphire that gradually shrouded pampa and heights, with nothing moving but a host of brilliant stars, sparkling like diamonds on a live hand.

In a few moments after sundown the scorching heat has given place to sharp cold, and he who rides by night across these deserts must carry a heavy woollen poncho; one sleeps indoors under blankets. Dawn is a miracle of pink and pearl, and in at the window comes the scent of the cherished flowers in the little garden, glistening with dew. The new day is of an indescribable freshness and serenity. Long before noon the sun is pouring vertical floods of sunshine upon the desert, the very sand seems to quiver with heat, and a relentless scorching breath seems to fill the world. But to this all-the-year-round heat the foreigner soon becomes accustomed—everyone, as a matter of fact, workers and officials alike, is a “foreigner” to this pampa; human life is imported like every other commodity here. But the children born of white parents in the nitrate fields are strong and sturdy, and it is not surprising that they who have lived for a year or two on the pampas find themselves restless in other places, suffer a feeling of constraint, a longing for these wide skies and far horizons.

The great development of the nitrate industry has created during the last forty years a series of ports along the Pacific, and brought to this once desolate coast, where there existed only a few fishing villages or outlets for desultorily-worked mines, a population which today exceeds 350,000. The workers directly engaged in the extraction, preparation and shipment of nitrate number about 70,000, about 50,000 of these being employed upon 173 oficinas, when all are in operation.

_Nitrate During and After the War_

When the writer last visited the Antofagasta Pampas, the nitrate business was just recovering after a period of post-war depression and the series of big works were getting back into the full swing of activity. The industry had been enormously prosperous just before the outbreak of war in 1914, but experienced very sudden reverses when the dislocation of shipping checked shipments. At the beginning of 1915 only 35 oficinas were in operation. A certain confusion was also occasioned by the fact that several big producers were German, but the accumulated stocks of these firms were eventually taken over and sold by the Chilean Government. At the time when the future looked gloomy, with oficinas idle and large stocks piled up in the warehouses of the nitrate ports, the great war call for nitrate in the manufacture of high explosives began, resulting in a new wave of prosperity. Shipping had to be found by the Allies for the transport of the chemical, and the ports of the pampa regions showed tremendous activity. But with the cessation of hostilities the urgent demands of manufacturers of explosives in the United States and Europe came to an end and the pre-war market offered by farmers did not immediately resume its calls. Shipping gradually returned to ordinary commercial channels, the scarcity of freight for normal commerce was at once apparent, and the rates that consequently prevailed were too high for profitable shipment of nitrate at the prices to which it fell. Many oficinas closed down. But in early 1920 a healthy reaction set in. Agriculturists began buying again, and added to this cheerful effect the industry was reassured by the non-materialisation of many threatening prophesies of the serious nature of the competition to be offered by artificially-produced nitrate.

The work of the active Asociación de Productores de Salitre de Chile first made itself felt in 1920. As its name implies, the group comprises firms engaged in Chilean nitrate production, practically every company subscribing with the exception of the two North American operators and a few small oficinas. Formed by the same energetic firms who previously organised, in 1889, the widely-spread Committee of Nitrate propaganda, the Asociación goes farther in that it controls the output of nitrate of soda and of iodine, agrees upon a price, f.o.b. in Chile, for these products, and deals with international distribution. Maintaining committees in London and Berlin, the Association has also opened branches in France, Belgium, Holland, Italy, Spain, Scandinavia, Egypt, Yugo-Slavia, India, South Africa, Japan, China, and all over North and South America, these delegations being added to wherever prospects for the consumption of nitrate are presented. The Association’s main object is to obviate the violent fluctuations of price that have threatened the industry from time to time; to watch markets closely and to avoid overloading them by retaining a check upon output. The Association’s headquarters are in Valparaiso, in constant cable communication with international centres. The effect of the work of this voluntary combine, upon which such other powerful groups as the Eastern rubber planters look with something like envy, has been undeniably beneficial although no efforts can counteract the adverse results of slackened demand.

In 1913 the price per Spanish quintal was eight shillings f.o.b. in Chile, or about $2 United States currency, while freight to British ports cost twenty-three shillings per ton, New York charges running about $6. Nitrate is packed into bags of two quintals each, ten bags thus weighing a little more than an English ton. During the war the price rose to thirteen shillings per quintal, but fell to between nine and ten shillings in 1919. Owing to a strong reawakened demand, plus the work of the Association, the price rose in 1920 until about the middle of the year it stood at seventeen shillings per quintal for deliveries in the spring of 1921, and even with freights ranging from £5 to £12 a ton to London, and $30 to $50 to New York, a handsome profit remained to producer and distributor. This prosperous period lasted until the general world paralyzation of markets was felt, and the big Government nitrate stocks of the United States and Europe were released. In 1921 the international dealers, with stocks of high-priced nitrate on their hands, faced the delayed post-war slump, and formed a pool to maintain prices at fourteen shillings per quintal. Sales were reduced to vanishing point, and the way was opened for more extensive rivalry from the sulphate of ammonia trade; eventually the pool agreed to lower prices upon an arrangement with the Nitrate Producers’ Association, by which £1,500,000 was accepted as part compensation. This sum is collected by a small levy upon all nitrate exported. Prices were then reduced to eleven shillings per quintal up to December, 1921, and to 10s. 3d. for deliveries in the spring of 1922. At these prices trade revived appreciably, and the world’s need for nitrogenous fertilisers set freights moving again.

Continuing for more than a year, the nitrate crisis affected no one more acutely than the Government of Chile, for in addition to finding themselves suddenly deprived of the most substantial part of their national revenues, they were faced with a staggering amount of unemployment. The oficinas, of which all but 45 were forced to close as a result of the moribund market, discharged some 40,000 men. There is no work in the Desert of Atacama apart from nitrate and copper industries; the land produces no food and there is nowhere to live. A stream of unemployed workers was almost immediately directed southwards, and while a proportion was absorbed by the farming and milling industries of the agricultural zones, numbers remained in the vicinity of the capital, a source of considerable anxiety. At one time it was reported that 10,000 men were camped out near Santiago, a charge upon the Government, and although the authorities were active in seeking to find employment on a series of public works, these plans were rendered difficult by the financial straits of the nation. The administration of Sr. Arturo Alessandri went into office with many schemes for the betterment of living conditions in the working classes, but has been seriously hampered by the economic trials that beset Chile within a few months of the change of government.

It is scarcely to be expected that the Government should see eye to eye with the nitrate producers in the question of sustained export at a time of market depression. The nitrate companies argue that it is useless to produce and attempt to export a commodity for which there is no demand, with immense stocks already choking international warehouses: that any such action would lower the price of nitrate to a level ruinous to the holders of the existing stocks and be bound to react disastrously upon nitrate producers. The Government rejoins that they desire a general lowering of nitrate prices, so that the fertiliser should be bought in larger quantities; they want to see a continuation of large quantities produced and exported, in order that workmen should not be, as during the 1921 crisis, thrown upon the country’s hands, and also in order that export dues should continue to fill national coffers. To this the producers reply that there is one ready means of lowering nitrate prices, and that is to take off or to substantially reduce the Government export taxes, amounting to £2.11. 4. per ton. As a matter of fact, there has been serious consideration of a governmental project to purchase the nitrate output direct from producers, reselling it to world markets free of tax, or with a very light duty. Here again plans are stultified first by lack of funds and secondly by lack of public enthusiasm for nationalisation of industries in the face of the world’s experience during the last ten years. There is a wide recognition of the fact that the nitrate industry has been built up by private enterprise of a kind invaluable to young countries.

He who tries to understand the nitrate situation is much hampered by different calculations of weights and costs, and will sympathise with the complaint of Don Alejandro Bertrand, who remarks that in statistics of the industry one finds “production and export of nitrate expressed in Spanish quintals of forty-six kilograms; prices quoted in pounds sterling per English ton of 1015 kilograms; while the British financial reviews vary, some giving the prices in shillings and pence per English hundredweight, while others quote pounds, shillings and pence per English ton. The Latin countries quote in francs, liras or pesetas, whose sterling exchange value varies, while Hamburg quotes in marks per zentner of 50 kilos.” Quotations also vary, continues the Inspector for the Chilean Government of Nitrate Propaganda services, according to whether the chemical is sold in Chile, where prices are always “free on board,” or free alongside vessel, or whether they are sold including ship freight to Europe or when placed in wagons at the port.

There are today 173 oficinas upon the _pampas salitreras_ of Chile. At the commencement of the commercial development of the fields, British capital and technique was foremost in the work, the efforts of the well-known Colonel North contributing largely towards the active interest of British investors. Chileans themselves have long been keen developers of nitrate properties and considerable investors; today their share is higher than that of any other nationality—a situation unusual in Spanish American countries, where industries are frequently left to foreign companies to a degree unhealthy for everyone concerned. The Chilean’s enterprise and business sense have indeed carried him far afield, his interests in Bolivia covering 60 per cent of the silver and tin mines.

The social system upon all oficinas is necessarily the same: dwellings and food supplies for the workers must be the consideration of the company, and in consequence large camp stores (_despachos_) are always maintained in which goods are sold to employés. Certain objections to this system are always heard, but it is here unavoidable; in all good and well-managed oficinas these stores are stocked amply, prices being kept down to a limit at or just above cost price. There is always a keen demand for workers, and no nitrate camp would retain its employés if conditions were not those uniformly regarded as just. The chief social difficulty of the oficinas is in keeping off company lands the enterprising piratical provision and liquor sellers who are likely to demoralise and rob. The only remedy is enclosure of the properties and fencing is becoming more usual. At one time the boundary of a nitrate grant was fixed by a string and a heap of stones, but since the Chilean Government has taken steps to regularise estates there has been less of the happy-go-lucky system of limits.

The acute interest of the authorities of Chile in the nitrate industry is due to the fact that it constitutes the chief source of national income. Over 60 per cent of Chilean revenues are derived from the export tax of two shillings and four pence per quintal, paid partly in paper and partly in gold, the total sum amounting in prosperous years to £7,000,000 or £8,000,000 sterling, or between $35,000,000 and $40,000,000 United States currency.

The tax is a heavy one, and equally weighty imposts are placed upon iodine, also a product of the nitrate oficinas. The product of the wonderful borax lake, in upper Antofagasta, on the edge of the Bolivian boundary, pays a similar tax, yet the considerable export of copper from Chile goes free. This unequal treatment of the different natural riches of the soil is frequently explained by the fact that copper is mined in many parts of the world and therefore the Chilean product must meet competition, an impossible feat if its cost were raised by the imposition of export dues. If, however, the cost of production of Chilean bar copper by the Guggenheim group is correctly estimated at eleven cents per pound, it is fairly plain that at the time during the war when Europe was paying twenty-six or twenty-seven cents per pound for this commodity it might have yielded a return to the country of origin.

Of the nitrate ports, Antofagasta is today the most lively and agreeable, although Iquique is still a rival in quantities of the chemical exported. Just north of Antofagasta lies Mejillones, the old port established in colonial days, but its equipment was found to be inadequate after the acquisition of this territory by Chile, and the creation of modern facilities and a modern city was decided upon. People who live in Antofagasta are proud of the place with excellent reason. The approach by train from the south is through ramshackle, happy-go-lucky fringes that have tacked themselves on, but the city itself is well equipped. Streets are wide, clean and well paved; shops are filled with merchandise from London, Paris and New York, and are not extravagant in price. Office buildings, many of which house the representatives of nitrate railways, nitrate and iodine companies, agencies of copper and borax companies, of shipping lines, brokers and several foreign and native banks, are spacious and well equipped; the telephone service compares well with that of many cities of ten times the size of Antofagasta, with its 70,000 inhabitants. Hotels are comfortable, service courteous, and tariffs less than one might expect in a city with not a single meadow or orchard within hundreds of miles, deriving all that it consumes from the Chilean farming lands farther south, from the packing-houses of Magellanes territory and wheat fields of the centre and south, or from the sugar and fruit regions of Peru or markets overseas.

The public park is an object of admiration of every visitor coming from the barren coast farther north or from the Atacama copper country to the south; it has been sedulously nursed into greenness that is the more remarkable since Antofagasta’s water supply is piped from the foothills 200 miles away—through lands so arid that more than once a fox of the deserts, driven with thirst, has followed the pipe-line across the pampas right into the city. The great pride of hospitable and cheery Antofagasta is in the country club to which the visitor is always motored along the sweep of the bay; here is a cool building with a fine dancing floor and a good cook. But its chief claim to admiration is the little garden, no more than a few feet square, tended so devotedly that all the year round it glows with gay flowers.

All the chief towns of the nitrate pampas, besides possessing rail transport to the Pacific, are connected by the main line of the “Red Central Norte” to Santiago, and thence to the farming regions of the Chilean south; there is through railway connection, thus, between such towns as Iquique and Antofagasta and the newly-operating packing-house of Puerto Montt. Agricultural Chile has no better markets than those offered by the thronged and busy nitrate pampas and ports of her own north, and from Llanquihue to Coquimbo, the last outpost of farming country in northern Chile, foodstuffs are sent by rail or sea to supply the great region of desert camps.

[Illustration: Antofagasta. The Nitrate Wharves.]

_Copper_

The future of copper mining in Chile is wrapped in uncertainty. The industry has already undergone a not unfamiliar transformation, with a deeply marked effect upon the Chilean population engaged in this work, for, commencing as a series of individual enterprises on the part of the native-born, it has become a large scientifically organised business operated chiefly by foreigners,[5] with the Chileans reduced to the position of wage-earners.

Footnote 5:

The most recent foreign entry into the Chilean copper field is that of the Japanese, with interests in three large deposits in Bio-Bio Province.

Under the old haphazard system, when a man would frequently go out into the desert alone, or with a single companion, hunting for rich veins of copper ore, a good living at least was the rule; when the discovery of a considerable deposit warranted the introduction of simple machinery, a few employés, transport animals, etc., many little and big fortunes were made. The buyers and smelters of last century also earned satisfactory returns. But, curiously enough, the huge organisations utilising immense masses of lower-grade ores, employing thousands of men and most modern machinery, with smelters at the mining camp, are generally stated to be run at a loss. There are reasons why such statements should be accepted with reserve, but looking at the matter purely from a Chilean angle it is at least questionable whether an industry which yields nothing to the national treasury in the way of export dues upon the mineral shipped out, and which draws many thousands of men from agricultural zones to an isolated and entirely artificial life under conditions tending to lower the standard of citizenship, has a sound _raison d’être_. Possession of the large Chilean copper deposits, whether operated at all, or operated without profit, does however enable a group of powerful interests controlling copper in North America to control also the copper markets of the world: for after North America, Chile is the scene of the greatest identified copper areas, the two series of mines together producing over 60 per cent of the total international output.

At the present time, that is to say, at the end of 1921, the situation in Chile with respect to copper is briefly this: there still exists, throughout the copper-sown regions of Coquimbo and Atacama provinces, a diminishing number of small mines following rich veins of the ore. Some of these are little more than holes in the ground, others are worked by organised companies with good machinery, housing several hundred workers and owning their own system of transport, as the Dulcinea mine in Copiapó. But almost everywhere the rich lodes, containing anything from 8 per cent of copper upwards, are disappearing; they have been hunted for centuries, and although scientific examination of these immense regions would no doubt reveal many unsuspected rich deposits, the accessible mines have been worked out to a considerable degree.

No more striking example of the rise and fall of a copper mining centre is to be seen in Chile than at the deserted city of La Higuera. It lies just off the road leading from La Serena (Coquimbo) to the iron mountain of El Tofo, upon a tiny thread of a stream trickling from the steep and tumbled mountains. The city lies in the shallow cup of an immense hillside, a patch upon the sandy and orange waste; numbers of black dumps mark the sites of old copper mines, a score of chimneys stand among the silent machinery of abandoned mines. At least a thousand houses make, from a distance, a brave showing.

But at the approach of the infrequent visitor in automobile or on horseback, the houses are seen to be windowless, empty; nothing moves in the sun but a stray cur or two, until presently an old woman with a child at her skirts peeps from a makeshift shelter. The whole place is dead; not an engine is working, not a gang of workers moves upon the great spread of properties. The exhaustion of rich veins, difficulty of competition with metal produced at less expense in a fallen market, coupled with tangled litigation, has brought back silence to this strange spot in the mineral-strewn mountain spurs that here crowd down almost to the sea.

The day of La Higuera is not long past; the mines of this extraordinarily rich region were actively productive during the present century. But a similar fate has already closed down very many smaller groups of mines, as it closed down smelters from Arauco to Antofagasta. In the prosperous days of the industry last century, when Chile was the greatest copper-producing country in the world, a big fleet of sailing ships, copper-bottomed, fast, with a famous list of captains, voyaged constantly between Swansea and the Chilean coast by way of Cape Horn, bringing British coal and merchandise and returning with bar copper or rich ores. A whole colony of Welsh set up the first scientific furnaces in Herradura Bay, just outside Coquimbo Town, and at a dozen points the little smelters of Copiapó and Coquimbo were busy; simple methods were used with profit, and many Chilean residents recall the time when the stem and stalk of the _cardón_ were always used to obtain a fine clear fire when annealing copper.

_El Teniente and Chuquicamata_

The most spectacular of the large copper mines in operation today in Chile is that of El Teniente, situated on the rim of an ancient crater of the Andes east of Rancagua, the nearest main line railway station. Sewell, the little town of mining employés, is connected with Rancagua by the private line of the Braden Copper Company, 72 kilometres in length, climbing from Rancagua’s altitude of 513 metres, or about 1600 feet, to the mining camp’s height above sea level of 2140 metres, or some 7000 feet, on the side of a terrific gorge in a tangle of rocky mountain shoulders and peaks. The main ore bodies lie above the site of the town and plant at altitudes ranging from 9000 to 11,000 feet, one peak, El Diablo, on the crater’s edge, rising to 13,000 feet.

[Illustration: Sewell Camp at Night.]

[Illustration: Sewell (El Teniente Copper Mines) near Rancagua.]

The amount of copper ore found in masses on the circular rim was calculated at the beginning of 1920 as 174,500,000 tons of 2.45 per cent, with (probably) 92,000,000 tons of 1.91 per cent ore in sight, with, in all probability, other large deposits in the vicinity. The main body now under exploitation yields a low-grade ore containing an average of 2½ per cent of copper in the form of sulphides. The ore is brought down to the plant by a railway line protected by sheds from the deep snow falling and standing for six months of the year; is crushed very fine, treated by the oil flotation system about which so much litigation has raged, and smelted by three processes during which the copper is freed from sulphur and iron. A small quantity of gold and silver remains in the bars shipped to market. Crushing 5000 tons of ore per day, a production of 100 tons of bar copper is at present possible; plans are also under way for new mills at a snow-free site on the railway line to Rancagua, at a spot where the junction of the Coya and a canal from the Cachapoal River forms a waterfall of 422 feet, yielding hydraulic power sufficient for the generation of 40,000 H.P. A new power house recently completed, on the Pangal River, another nearby Andean torrent joining the Cachapoal and Coya, adds to the equipment by which the Braden Company contemplates 10,000 tons of daily crushing, operations which should result in the production of over 70,000 tons of bar copper each year. Paralyzation of international markets has so far checked the materialisation of these plans, and during 1921 the plant was operated at no more than half its capacity. The most prosperous year which the mine has had so far was that of 1918, when El Teniente produced nearly 35,000 metric tons of bar copper, out of the Chilean total production of rather more than 102,200 tons: a year later, 1919, the Braden Company sold and shipped only 10,000 tons of bar copper.

Rancagua, a somnolent little town lying about 70 miles from the Pacific, has no direct rail communication with the sea, and derives what liveliness it possesses from its position upon the main line to Santiago, its chief market, and as the terminus of the Braden Company’s electrically-operated line to El Teniente or rather to Sewell—which has an older name, Machalí. At times the activity resulting from the mine’s access to this town, and this town alone, is regarded without any pleasure by the townsfolk, for when strike trouble occurs there is likely to be a descent of discontented workmen and families. Such an occasion occurred at the time of the disorders at the end of 1919, when an army of expelled men with their families walked down the narrow track from Sewell to Rancagua, and although the journey of 72 kilometres occupied some three days, and the spirit of the strikers was reduced by their experiences, Rancagua was alarmed and embarrassed by their presence.

A curious mixture of workers finds its way to this and other mining camps of Chile. The bulk consists of the hardy Chilean himself, concerning whose good qualities no employer of intelligence and feeling has any doubts: he is strong, trustworthy, kindly—but can be roused by drink or anger to violence. Treated well, he is the best element among massed groups of workers. But side by side with the genuine and sound Chilean is not only the malcontent roaming from north to south, from camp to camp, according to his own will or the exigencies of the Ley de Residencia, but the “hard case” from half a score of different countries. The mines are refuges for every variety of man who is down and out: they offer fertile ground for the sowing of Bolshevik propaganda or the seed of the I. W. W. of California, whose flag has been seen more than once flaunted in Chilean streets. The curious artificial life of the camps, with its poor rewards, the lack of healthy recreation, of the sight of the horizon, of birds and fields and flowers, of any interest at all but that of daily toil, lends itself to the development of grievances.

From Rancagua to Coya the line is open to the public, the pleasant and famous Baths of Cauquenes lying in the deep green gorge of the Cachapoal River followed by the track. Casual visitors to the camp at Sewell are however not encouraged: there is a wary eye kept upon possible purveyors of such forbidden joys as alcoholic liquors. El Teniente is as “dry” as managerial care can make it, but the fact that 1200 to 2000 bottles of whisky and brandy are seized every year by the camp detectives without putting any end to the attempts of the _guachucheros_ (bootleggers) appears to prove that enough liquor gets through to make the business pay. Despite this lack of welcome to the unintroduced stranger, however, Sewell is hospitable to the visitor, and any accredited person receives pleasant courtesies.

The rail automobile which takes such visitors from Rancagua to the camp offers by far the most agreeable form of travel; the bright green fields and sub-tropical verdure of the sheltered plain country gives way to deep folds of mountain spurs, and presently, rising into colder air, vegetation is reduced to a few hardy shrubs and mosses, and the violet and tawny shoulders of the Andes rise from the banks of the racing river. When I visited El Teniente the mountains were bare; their rocky sides, steep, incredibly scored and peaked, took on at sunset and dawn brilliant hues of rose and flame; but before I left the first snow fell, transforming the whole country in a single night. A thick blanket filled the crevices of the sheer rocks, black ridges and points alone emerging; the piled tenements of the miners, clinging like birds’ nests on the face of a cliff, were blanched, half-buried, pathless. Communication with the outer world, by the single line down the ravine to Rancagua, was actually not much more restricted, but with the blocking of even the few mountain tracks open in summertime the isolation of the camp was emphasised.

There are about 2800 miners engaged at El Teniente, but the total population of the camp, including the workmen’s families, the officials (chiefly North Americans), employés of railways, stores, etc., is usually over 12,000. All this artificial town hangs precariously on a steep slope immediately opposite to the jagged crater where the huge copper deposits are embedded. Formerly, rows of camp buildings were built on the mine’s lower slope, but avalanches of soil, rock and snow necessitated the removal of dwellings to the present site, at the 7000-foot level.

Scarcely a sign of mining operations is visible from across the mountain chasm, although work has been going on here for at least 200 years. Owing to the treacherous nature of the country rock and danger from snow slides during six months of each year, the ore bodies are now attacked from below; entrances to the intricate system of shafts and subterranean passages are lost in the rugged crenellations of the old volcano. Yet the place is honeycombed: one tunnel, starting from the more recently approached Fortuna side, runs all round the three-quarter-mile-wide crater; there are innumerable hoists, ore-passes, shafts, galleries and tunnels, that, with the railways and powerful machinery and gangs of workers, comprise an industrial town hidden in the mountains.

The second large copper property operated by the Guggenheim interests in Chile is at Chuquicamata, in the high deserts of the province of Antofagasta, at about 11,000 feet above sea level. The region has long been famous for its copper-ore deposits, and small, rich veins have been worked during and since colonial times.

Most of these high-grade ores have been exhausted near the surface, whatever may lie hidden in the heart of the region: the principle adopted by the Chile Copper Company, as that of the Braden, is to attack large bodies of low-grade ore upon a big scale and in a scientific manner. But “Chuqui” is an open-air mine situated on a tawny desert, in extraordinary contrast with El Teniente, and the actual processes employed are different because the two bodies of ores differ in composition.

[Illustration: Sewell (El Teniente Mine) in the Snows of June.]

[Illustration: Railway between Rancagua and El Teniente.]

Chuquicamata is reached by way of the Antofagasta and Bolivia Railway. An all-day ride from Antofagasta Port takes the traveller across the flaming nitrate pampas, waterless, without a sign of green, winding upwards until the air is chill and the wind bleak. At sundown, when the station of Calama is approached, the altitude of nearly 8000 feet has been attained. In the distance the lights of the mining camp flicker at a higher level; Calama itself shows a brilliant flare of green, for here is the river Loa and a little modern town with fields and orchards superimposed upon very ancient remains. Gold, pottery, and textiles showing Inca influence have been found in the old cemeteries of Calama.

There is from Calama a small branch line of a few miles running to Punto de Rieles, and some use is made of this to ship merchandise, etc., to and from the Chuquicamata camp: but a private line is projected, and a number of company motor cars traverse the road across the saffron desert between the main line and the mines, ignoring Punto de Rieles as much as possible. That ramshackle village is, indeed, little more than an impudent hanger-on of the big works; practically every little frowsy shack is a saloon or a gambling-den, more than one of the most enterprising brothel-keepers being white ex-employés of the camp. Even were any serious attempt made to operate Chuquicamata as a “dry” camp, the existence of this terminus-village a mile away would counteract these efforts.

The great ore bodies of Chuquicamata lie in a range of low, pale-hued hills rising gently from the shelving, wind-swept, dust-strewn plain; the chief mass of ore is easily attacked by steam shovels placed upon four or five different levels cut along the face of the most accessible slope, a system of light railways carrying the blasted-out rock, often of the beautiful blue and green tints exhibited by copper sulphates, to the plant in a shallow saucer below. Here also are the residential quarters of this isolated camp, where there is neither vegetation nor water, and a dust-laden wind prevails over the cold, widespread territory, bordered only by the snow-crowned peaks of such Andean giants as S. Pedro and S. Pablo.

The Chuquicamata ores are, chiefly, basic sulphates of copper, yielding about 1.7 per cent of the mineral. The present plant has a crushing capacity of 15,000 tons per day, which amount should produce 200 tons of bar copper. As work goes on all day and every day, this production if sustained would produce in twelve months over 70,000 tons of electrolytic copper, a quantity which Chuquicamata has not yet recorded; the mine’s best year so far was that of 1918, when a total of 101,134,000 pounds of electrolytic copper was produced, or about 45,000 tons. The leaching or lixiviation process is employed here: the ores, crushed fairly fine, are soaked in a solution of copper sulphate for 48 hours, during which period the copper in the introduced ore is drawn into the liquid. This, when chlorine has been extracted, is poured into vats through which strong electric currents are passed, causing the copper to be deposited in metallic form upon the copper sheets suspended therein. The sheets and the deposited metal are melted and cast into bars, the process producing a high-grade electrolytic copper bringing top market prices. Eight hundred million tons of low-grade ore are stated to be in sight at Chuquicamata, and a plant capable of turning out 600 tons of bar copper daily is talked of.

Power for operating the Chuquicamata mine, works and camp is derived from Tocopilla, 100 miles distant on the seacoast, where the company’s plant is situated. Transmission lines follow the course of one of the nitrate railways from the port to El Toco, thence running out across the desert, where a highway also extends. Since no fuel exists in this northerly region, nor are there water-falls available, the plant uses petroleum imported from North America to generate the power required.

Chuquicamata employs about 2000 Chilean or Bolivian, with a small sprinkling of Peruvian, workers, housed under conditions which leave something to be desired. Many of the huts are made of sheetiron, with partitions dividing the rooms; the floors are of mud, and an opaque substitute for glass obscures the window space in too many cases. The better-class houses are insufficient for all the native-born workers, and it is not surprising that a degree of discontent has more than once been fomented in the camp. Daily wages run higher here than at El Teniente, averaging over nine Chilean pesos per day as against rather less than eight pesos, but this raised scale does not compensate for the greater cost of living and other disadvantages. Fuel is one of the serious difficulties; coal is almost unknown, and the employé’s womenfolk are seen cooking over a charcoal brazier, or a fire made of an umbelliferous plant from the mountains (_llareta_), or a few pieces of wood brought from long distances. A great deal is said by the company of the Welfare Work Department: its most striking exemplification is in the big clubhouse which, well equipped and decorated, is however used almost exclusively by the North American officials and their families.

In addition to the two big mining plants at El Teniente and Chuquicamata, the Guggenheim interests in Chile include the old-established smelters at Carrizal and Caldera ports: the latter, in common with all the smelters founded during the last century, took only high-grade ores, the average of the mineral accepted here working out at about 10½ per cent of copper. These works turned out over 5000 tons of copper ingots in 1918, but were closed in 1921, following the slump in prices.

Chuquicamata is operated by the Chile Copper Company, a subsidiary of the Chile Exploration Company; El Teniente is operated by the Braden Copper Company, which is owned by the Kennecott Copper Corporation, one of the Guggenheim creations also controlling Alaskan and Utah copper properties. The Braden Copper Company is stated to have shown a deficit of $1,500,000, United States, in 1919.

_Pudahuel and Potrerillos_

Geographically speaking, there lie between El Teniente and Chuquicamata two other large copper deposits acquired by North American interests since the European War. Between Santiago and the sea lie the Pudahuel mines, identified at least a hundred years ago, worked for their rich surface veins, and now owned by the Andes Copper Company, a subsidiary of the Anaconda interests. Immense masses of low-grade ores, rivalling those of the Guggenheim interests in extent, are said to be available, but although in 1920 projects for a big plant were under active development, work was slackened by depressed markets and the operation of the deposits is not yet in sight.

A similar fate has befallen the widely heralded plans connected with another Anaconda property, a huge deposit of low-grade copper ores at Potrerillos, in the Andean spurs east of the railway junction at Pueblo Hundido in Atacama province. The main ore bodies lie in a ravine about 12,000 feet above sea level and consist chiefly of sulphides and oxides. At the time when I visited the region in late 1920 the treatment of these ores had not been decided upon, and no machinery installed, although an expensive housing scheme had been carried out at the mine. A railway between the tiny village of Pueblo Hundido, a handful of houses in the middle of an apricot-hued desert, and the high-placed mine were in operation; and a power plant, burning petroleum, had been set up at Barquito, on the coast a few miles south of Chañaral, the transmission lines running out across the sandy waste for some 130 miles.

Work on the Potrerillos installation was suspended about the middle of 1921, before a single ounce of copper had been produced. High above the copper deposits are extensive beds of sulphur, and upon the extraction of this mineral, needed in certain processes employed in treating low-grade ores, a certain amount of work has been done.

There are 16,000 mines of copper registered in Chile, covering an area of 57,000 hectares upon which the mining tax of ten pesos per hectare is paid. Of the producing establishments, Chuquicamata and El Teniente are by far the greatest, exporting in 1918 nearly eighty per cent of Chile’s total production. From the Caldera smelters was shipped a total of 5217 metric tons; Catemu produced 3790 tons; Gatico, 3708 tons; Naltagua, a French property, 3653 tons. Small quantities came also from El Volcán, El Hueso, and the Chañaral smelters, also in French hands. For the last ten years Chile’s output of copper in comparison with the total world supply has varied between 4 per cent in 1911 and 1912, and 8 per cent in 1918. By far the greatest producer of copper today is the United States, with a highest record of 880,000 metric tons in 1916, followed by Japan, shipping her highest recorded figure in 1917, when 124,000 tons was produced; Mexico, 75,000 tons; Canada, averaging 50,000 tons; and Peru, 45,000.

_Iron_

The story of Chile’s iron deposits and works offers one of the most curious chapters in her mining history.

The most important of the identified deposits lie in the desert country north of Coquimbo, the fields at El Algarrobo and Algarrobito in the Department of Vallenar, Atacama Province, having interested a German firm some years before the war. No practical results were achieved, although the region recorded a small export of manganese, from the Astillas beds, until economic conditions checked these shipments soon after the beginning of this century. Proximity of quantities of manganese ore to the iron fields, reported as being of immense extent, has raised repeated hopes for the foundation of a great industry, but the crux of the problem is the absence of adequate fuel or water supplies, and the unproductivity of a sterile territory.

The only works so far established in connection with Chilean iron ores depend upon what is the most remarkable ferruginous deposit on the West Coast, paralleled only by the Itabira peaks in Brazil and the iron mountain of Durango in Mexico. El Tofo, some forty miles north of Coquimbo town, and fifteen miles from the Pacific, is a round hill practically composed of hematite ores running over 65 per cent pure, the quantity in sight totalling at least 300,000,000 tons. The hill stands among an imposing array of rolling mountains, and both dwellings and mine workings are daily enshrouded in seas of white mist.

Early in the present century this huge deposit was acquired by a French company, the Société Altos Hornos de Corral, which mined a quantity of the ores and transported them by light railway to the little bay of Cruz Grande and thence to the south where, at the port of Corral in Valdivia province, a smelter was erected, the first experimental production of pig-iron taking place in 1910.

The company was fortunate in obtaining from the Chilean Government various privileges, including the concession of 58,000 hectares, or about 145,000 acres, of southern forest land, estimated to be capable of yielding 50,000,000 cubic metres of fuel wood. The Prudhomme process is employed at Corral; wood fuel alone is required, and an important item in the calculated income from the operation of the plant is that of the sale of by-products (charcoal and alcohol) obtained from the wood, in addition to the output of the blast furnaces. The plant was built to produce 50,000 tons of pig-iron annually, and would require for this purpose nearly half a million cubic metres of fuel wood; the expectations of the company have, however, not been realised, and when I saw the plant in 1920 it had been inactive for several years. A week of trial under the auspices of Chilean Government engineers headed by Dr. Manuel Prieto was undertaken in July of the same year, and an optimistic report issued: a few noteworthy points are quoted below.

With regard to the cost of production, the report states that the iron ore costs at Cruz Grande nearly ten pesos per ton (the peso in mid-1920 being worth about one shilling): but the sea freight, unloading at Corral, and transport to the smelter cost 14 pesos per ton. Despite the high freight charge, the cost of producing the 345 experimental tons worked out to only 152 pesos per ton, a quantity of the company’s ingots finding a sale at 345 pesos per ton. If the calculation is correct that, working sustainedly, the smelter could produce pig-iron at all in costs of about 55 pesos per ton, the only problem is that of finding sufficient local or other South American markets prepared to take yearly 50,000 tons.

To obtain this quantity, the engineers estimate the employment of 70,000 tons of iron ores, purchased from El Tofo at 8.40 pesos per ton. The famous iron hill is no longer operated by the French Company, for during the war the deposits were leased to the Bethlehem Steel Iron Mines Company, and an extensive establishment created. A contract exists by which the Bethlehem interests guarantee to supply a maximum of 100,000 tons of ore free on board at Cruz Grande to the Société Altos Hornos, for thirty years.

If the fate, so far, of the Prudhomme smelter at Corral is misty despite high promise, that of the big installation at El Tofo is no less clouded. As soon as the Bethlehem Company took possession, large sums of money were spent on an entirely new installation. Land was acquired at Cruz Grande, an oil-burning power plant set up, the railway line rebuilt and electrified, and a loading basin for the Company’s special ore-carrying steamers, each of 17,000 tons capacity, cut out of the solid rock. The basin is 500 feet long by 40 feet wide, and on the dock side are 17 chutes each with a storage space for 20,000 tons of ore, operating electrically, and built to discharge their contents into 17 hatches so that each ship would be loaded in four hours’ time.

At El Tofo itself electric shovels attack the face of the hill on four or five levels; the crushing machinery is, like the ore-carrying outfit, the most modern that Bethlehem’s experience has evolved; strings of dwellings for workmen and officials stand upon the spur leading to the iron hillside. The Company’s intention, I was informed by the sole official left in the silent camp, is to ship the rich ores of El Tofo to Sparrows Point, Maryland, where special equipment has been built to unload the Cuban ores imported by the Bethlehem interests. The haul from Chile is however considerably longer than from Cuba, and although transit by way of the Panama Canal has brought the Atlantic Coast of North America into closer commercial touch with the West Coast of South America, the cost of freight or other equally powerful reasons have prevented materialisation of the original plans. In more than one instance, wealthy firms making immense sums of money during the great war appear to have placed capital in investments far afield from which a return was not desired for reasons having a certain relation to the tax collector; and whether or no these considerations had any bearing upon the acquisition of large copper, iron, tin and silver deposits in various parts of South America by powerful companies, the fact remains that vast mineral resources have been added to the properties of a comparatively small group, and that their active operation may in the future affect international markets.

Early in 1921 announcement was made to the effect that a concession for thirty years of 140,000 hectares of forestal land in Llanquihue Province had been granted to a German firm, for the installation of large iron works. At the same time the concessionaires, who were stated to be engineers representing the Krupp firm, secured an option upon the Pleito iron ore deposits in Coquimbo and another series of mines in Atacama known as the Zapallo fields. Several Chilean newspapers, including the energetic _Mercurio_, took exception to the land grant, pointing out the possibility that Germany was evading the spirit of the Treaty of Versailles, prohibiting her from manufacturing arms or guns within her own territory, by setting up big iron and steel factories upon foreign soil; it was also objected that the territory conceded includes a considerable part of the forestal reserves left in South Chile. A strip of woodland two kilometres wide had been reserved by the Chilean Government between the concession and Lake Todos los Santos, and with this exception the German grant extended from the lake to the foot of Calbuco volcano, with water outlet to the Pacific by way of an arm of the Gulf of Reloncaví. The Petrohue River is said to offer power for large hydraulic installations, and two other and smaller streams also run through the grant.

Ore from the north would, according to the plan, be transported to wood-burning smelters in the south. But difficulties arising from the claims of property-owners in the conceded tract of forest appear to have checked the scheme; the concessionaires announced their withdrawal in early 1922.

The attitude of the Chilean Government is, quite naturally, that it is desirable for large industrial development work to be promoted: and that the concession of forestal land given to the German interests would have been gladly granted to other nationals making similar propositions.

_Gold and Silver_

In early colonial days there was a fair yield of gold from Chile, chiefly obtained from the sands of the southerly rivers and deposits, as those of Tiltil, situated in the mountains between Valparaiso and Santiago, and the shining sands of the river beds of Huasco. It is estimated that from the days of the first settlement to the end of the fifteenth century Chile produced 131,000,000 pesos’ worth of gold, 63,000,000 worth in the sixteenth century and 167,000,000 in the seventeenth.[6] After Independence and the encouragement of foreign enterprise, production rose in less than fifty years (1801 to 1850) to 226,000,000 pesos (all these calculations being reduced to pesos of eighteen pence for purposes of comparison), but weakened abruptly when the deposits of alluvial gold, eagerly sought and worked, became exhausted by the end of the century. The present yearly production of gold averages about 2,000,000 pesos, chiefly from the Alhué mines near Rancagua.

Footnote 6:

Betagh, writing of conditions in 1720, says that there were gold mines at Copiapó, “just beyond the town and all about the country likewise, which have brought many purchasers and workmen thither, to the great damage of the Indians; for the Spanish magistrates take away not only their lands but their horses, which they sell to the new proprietors, under pretence of serving the king and improving the settlements.” He also noted the saltpetre, lying “an inch thick on the ground” in the north, and says that the country is full of all sorts of mines. About the year 1709 two lumps of gold found near the Chilean frontier, one of which weighed 32 pounds, was brought by the Viceroy of Peru, Count Monclove, and given to the King of Spain. In another washing place near Valparaiso belonging to priests gold nuggets are found, he says, ranging from a few ounces to one and a half pounds in weight.

The present production of silver is also a shadow of its former record. Once upon a time rich silver mines were worked at Uspallata, near the Pass; these were already abandoned in 1820, when Peter Schmidtmeyer made his journey. Chile never rivalled Potosí, where travellers of the early sixteenth century (before the amalgam process was introduced in 1571) might see 6000 furnaces shining together at night upon the famous hill; but her mines recorded a splendid total in one quarter-century, 1876 to 1900, when 432,000,000 pesos’ worth of silver was produced. Lowered international prices and the exhaustion of rich veins so reduced the industry that in 1915 only 1,000,000 pesos’ worth was produced, and although later years have reached values of over 3,000,000 pesos, future great production depends upon new discoveries and scientific operation. The mining engineer still has much work to do in the deep folds of the Chilean Andes, while the sands of the islands south of the Strait of Magellan have yielded, and are likely to yield again under good management, rich harvests of gold.

_Coal_

The coal industry of South Chile owes its greatest impetus to the energy of Matias Cousiño, who organised development dating from 1852; but mining for commercial purposes began as far back as 1840, when a field near Talcahuano began to supply the needs of Chile’s first steamship line, forerunner of the present Pacific Steam Navigation Company.

The entire region of Chile from Concepción southwards to the Territory of Magellanes is dowered with coal deposits, but the richest region is a series of mines strewn for one hundred miles along the coasts of the provinces of Concepción and Arauco. Wealth in coal has brought a large number of factories and mills to the prosperous city of Concepción, was a factor in the establishment of the chief naval station of Chile in the fine bay of Talcahuano—the best-sheltered port of Chile—and developed smelting and metal-refining works at Tomé, to the north of Talcahuano, and in Coronel and Lota, farther south.

Many coal beds known to exist in the Chilean south are unworked as yet owing to lack of transport in undeveloped regions, but in addition to the big mines in operation in the rich regions of Arauco and Concepción, a deposit is being worked near Valdivia (the Sociedad Carbonifera de Máfil) while the Loreto beds are also under exploitation in Magellanes Territory, near Punta Arenas. The product of some of the Chilean mines is of excellent quality, but the product was, before the war, insufficient in quantity and not of a grade rendering it suitable for all railway and steamship uses. It was therefore supplemented by hard steam coal imported from foreign countries; before the outbreak of war in 1914 British mines were shipping about 1,000,000 tons per year to Chile, Australia sent about 450,000 tons, and the United States sent small quantities that varied between 3000 and 100,000 tons. The supply from Welsh and Australian mines was, during the war, diminished almost to vanishing point, and at the same time imports from North America rose to three or four hundred thousand tons, and the Chilean home production was immensely stimulated.

Chile’s producing mines are fourteen in number, twelve of these lying in the Arauco region; in 1909 production amounted to less than 900,000 tons, but had risen to over 1,500,000 in 1918 and 1919. Eleven to twelve thousand men were then employed, as against 9000 in 1911. The most important operators are the Compañia de Lota, Coronel y Arauco, a combination owning four mines and tributary railways, employing 3670 workers, and producing more than half a million tons of coal yearly. Next comes the Cia. Carbonifera y de Fundición Schwager, also situated at Coronel, employing 2800 men and producing over 400,000 tons; the only other company with an output of over 200,000 tons annually is that of Cia. Carbonifera Los Rios de Curanilahue, employing 1500 men. Both here and in the Lota mines the plant is operated by hydro-electric power, and throughout the Chilean fields the standard of machinery and equipment is high. The general width of coal seams operated in Chile is from fifty to sixty inches.

The wages paid are about the same as for other mining and industrial work in Chile, ranging from five to seven pesos (paper) per day. The Coronel mines, many of which are deep-seated and run under the sea, pay at a higher rate, averaging eight and a half pesos, but the Loreto mine in Punta Arenas, where workers are scarce, pays its employés nearly twelve pesos a day.

Chilean coal miners work only 280 days in the year, but conditions are not always acceptable and there have been from time to time serious strikes; the last, occurring at the beginning of 1922, was said to be mainly fomented by the considerable foreign element.

Among the remaining coal companies of importance are the Cia. Carbonifera de Lirquen (Penco); the Cia. El Rosal (Concepción); and the Cia. Carbonifera de Lebu, owning three mines and a railway.

The price of Chilean coal responded to war conditions. In 1914 it stood at about 13 paper pesos per ton; in 1915 it rose to 25 pesos, and thence steadily climbed to 57 pesos in 1917, to 70 in the following year, and to 85 pesos in 1919. With the cessation of hostilities these prices, which were comparable with those of foreign imported coal, dropped; at the same time demand fell, fewer vessels requiring bunkering, not only because older fuel depôts became again available but because the extended use of the Panama Canal by international vessels is making itself felt more keenly. South Chile found its ports recording many fewer foreign vessels in 1919 and 1920 than in former years.

[Illustration: Curanilahue Coal Mine, Arauco Province.]

[Illustration: Dulcinea Copper Mine, Copiapó Province.]

[Illustration: Chuquicamata Copper Mine, Antofagasta Province.]

In the Lonquimay region, along the valley of the upper Bio-Bio, are deposits of petroliferous shales, upon which a big industry will some day be founded. The most hopeful reports suggest the presence of a great oil-bed, but it is undisputed that the superficial layers or _capas_ yield 5 to 6 per cent of petroleum, the lower part of the bed yielding 12 per cent. In Scotland a percentage of 5 per cent is considered good enough, and the development of the prosperous North British industry could no doubt be duplicated in Chile—with adequate transport facilities. Manifestations of petroleum have been also identified farther south. Don Salustio Valdes, an enthusiastic Chilean mining engineer, considers that the most promising deposits are in the Province of Llanquihue, at Carelmapu, where the Cia. Petroléos del Pacifico has acquired territory; in Magellanes Territory, near Punta Arenas, where the Sindicato de Petroléo de Agua Fresca is operating; and on Tierra del Fuego, upon the north shore of Useless Bay. Natural gas escapes in considerable quantities in all these regions.

Borax is produced by a British company from a wonderful and beautiful lake-like deposit at Ascotan, on the Antofagasta and Bolivia Railway almost at the Bolivian frontier. Nearly half the world’s supply comes from Ascotan, the pre-war export of Borax Consolidated averaging 40,000 tons, a quantity subsequently reduced owing to the imposition of a heavy export tax and high freight rates. The deposit lies at an altitude of over 12,400 feet with temperature ranging from 24 degrees below zero (Centigrade) and 32 degrees above, so that this well-organised company works under climatic difficulties accentuated by high winds, rain and snow.

Sulphur is abundant in Chilean mountains from north to south, a few thousand tons being annually produced, chiefly for the use of the copper mines; lead, cobalt, nickel, aluminium, graphite and bismuth also exist in the highly mineralised north; deposits of manganese are worked on a small scale near Merceditas in the interior of the Province of Atacama.