Chile’s Driving Force

Once imprisoned by Pinochet, the new Socialist president Michelle Bachelet wants to spread the wealth initiated by the dictator’s wrenching economic policies

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Most of Chile's copper mines are in the dry and cloudless desert north. One of the biggest, Los Pelambres, some 125 miles north of Santiago, is largely owned by the family of Andrónico Luksic, who died last year at 78. As a young man, Luksic sold his stake in a small ore deposit he had discovered to investors from Japan. The Japanese thought the price Luksic had quoted them was in dollars when in fact it was in Chilean pesos. As a result, Luksic was paid a half-million dollars, or more than ten times his asking price. This marked the beginning of his stupendous fortune. Last year, Los Pelambres earned $1.5 billion, thanks to record copper prices stoked by booming Asian economies. "Prices will stay high for at least the next three years," says Luis Novoa, a financial executive at Los Pelambres. "China and India just keep growing and need all the copper we can sell them."

At the upper edge of Los Pelambres, 11,500 feet high, the air is so thin and clear that the ridges from exhausted copper veins appear closer than they are, as do mammoth mechanized shovels scooping up new ore deposits at the bottom of the canyon-size pit. "All these deposits were once liquid magma—molten rock deep below the surface—and could have spewed out of volcanoes, like what happened all over Chile," says Alvio Zuccone, the mine's chief geologist. "But instead the magma cooled and hardened into mineral deposits."

The deposits contain less than 1 percent copper; after excavation, they must be crushed, concentrated and dissolved into a water emulsion that is piped to a Pacific port about 65 miles west. There the emulsion is dried into a cake (now 40 percent copper) and shipped, mostly to Asia. The Los Pelambres work is the simplest part of the process. "We're just a bunch of rock grinders," says Zuccone.

Because mining takes place in the almost unpopulated northern deserts, it has escaped environmental controversy. But forestry has stirred heated debate. "Under the volcanoes, beside the snow-capped mountains, among the huge lakes, the fragrant, the silent, the tangled Chilean forest," wrote Pablo Neruda (1904-73), Chile's Nobel laureate poet, about his childhood in the country's wooded south. Today, little of his beloved forest survives. Gone are the bird that "sings like an oboe," and the scents of wild herbs that "flood my whole being," as Neruda recalled. Like yellow capillaries, timber access roads and bald patches scar the green hillsides.

In 1992, American entrepreneur Douglas Tompkins used some of the proceeds from the sale of his majority stake in the sportswear firm Esprit to create a refuge for Chile's shrinking, ancient forests at Pumalín, a private park encompassing 738,000 acres of virgin woodlands some 800 miles south of Santiago. Initially, Pumalín was hugely controversial. Ultranationalists claimed that because it amounted to a foreign-owned preserve that bisected the country, it threatened Chile's security. But opposition dissolved once it became clear that Tompkins' intentions were benign. Several Chilean billionaires have followed his example and bought vast forest expanses to preserve as parks. (In Argentina, however, where Tompkins created a 741,000-acre preserve, opposition to foreign ownership of environmental refuges has intensified. Critics there are calling for Tompkins to divest—despite his stated intention to donate holdings to the government.)

Pumalín is also important because it is one of the few temperate rain forests in the world. Annual rainfall here totals a startling 20 feet. As in tropical jungles, the majority of trees never lose their foliage. Moss and lichen blanket trunks. Ferns grow nine feet tall. Stands of woolly bamboo rise much higher. And other plant species scale tree branches, seeking out the sun. "You see the same interdependence of species and fragility of soils that exist in the Amazon," says a guide, Mauricio Igor, 39, a descendant of the Mapuche Indians who thrived in these forests before the European conquest.

Alerce trees grow as tall as sequoias and live as long. Their seeds take a half century to germinate, and the trees grow only an inch or two a year. But their wood, which is extremely hard, has long been prized in house construction, and despite decades of official prohibitions against its use, poachers have brought the species to the verge of extinction. Pumalín is part of the last redoubt of the alerce—750,000 acres of contiguous forest stretching down from the Andes on the Argentine border to the Chilean fiords on the Pacific.

In a cathedral stand of alerces, Igor points out one with a 20-foot circumference, rising almost 200 feet and believed to be more than 3,000 years old. Its roots are entwined with those of a half-dozen other species. Its trunk is draped in red flowers. "I doubt even this tree would have survived if Pumalín didn't exist," he says.

Mexico City and Lima built imposing Baroque-style palaces and churches with the silver bonanzas mined in Mexico and Peru during the 1600s and 1700s. But the oldest structures in Santiago date back only to the 19th century. "Chile was on the margins of the Spanish Empire, and its austere architecture reflected its modest economic circumstances," says Antonio Sahady, director of the Institute of Architectural Restoration at the University of Chile, which has helped preserve older Santiago neighborhoods.

Now Santiago's more affluent citizens are moving eastward into newer districts closer to the Andes. "They have embraced the California model of the suburban house with a garden and a close view of the mountains—and of course, the shopping mall," says Sahady. I drop by a mirrored high-rise where one of the city's largest real estate developers has its headquarters. Sergio de Castro, Pinochet's former economics minister and architect of his reforms, is chairman of the company.


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