Chile: the balanced view : a recopilation of articles about the Allende years and after

The foreign currency investments for mining, treatment plants for both mines, the pelleting plant, the mechanized wharf, components, and other auxiliary works (electric powerwill be provided by ENDESA) will total $102.3 million. The local currency investment cannot be calculated,inasmuch as the estimates in escudos were prepared at different times for the various sections that make up the Huasco míning complex, However, an approximate estímate of local currency investments would be $ 150 million, New production at Algarrobowill begin in 1976 and will representa gross increase of$ 36 millíon in foreign curreney above the present income. Boquerón-Chañar will begin to operate in 1978and will bring in a gross income of approximately$30 mili ion more thanthe present income, The total increase in income contributed by both mines might theretore be as much as $ 66 mili ion, Other iron ore mines will probably be developed or expanded, They belong to the medium orsmall-scale mining sector; which currently accounts tor ahigh percentage ofthe total exports of ¡ron ore; however, no increase in production is projected for these mineS. We are considering opening the Cerro Negro Mine sometime in the future. It can produce approximately 7 million tons of ore per year. Later, the Laco deposit will be throughly explored. Information on the potential of this deposit is inconsistent 4) Nitrates antl iodine Chílean nitrates used for nitrogen fertilizers are ingreater demand abroad and com– mand a better price. However, in order to increase production of nitrates, a great deal of the míning and transportation equipment currently in use in plants has to be replaced. The total investment is approximately $ 30 million, of which 90 percent represents equipment imported with foreign currency. With new equipment, a considerable increase over the 1973 level of production could be achieved, as shown in the chart below: Produclion Exports FOS Income Year (metric lons) (metric lons) export price US$ 1973 676,000 426,000 44 18,000 1974 850,000 600,000 80 48,000 1975 1,000,000 750,000 85 64,000 1976 1,100,000 850,000 85 72,000 It is evident that th.e production levels of iodine, sodium sulfate, and other products related to nitrate production will also increase. However, the figures for these products have not been considered, even though the price of íodine is high (approximately US$ 4 per kg) and its production would reach a level of more than 1,000 exportable tons, , It has been as~umed that national consumption of nitrates will not increase signifi– cantly -a hypothesls that bears no relation to the intensive agrarian policy. After 1976, however, ammonia and urea will be produced from gases extracted in the Straits of Magellan, ~nd these fertilizers will probal;llysupply the national nitrogen requirements, leavlng Chl.lean nltrate with al~ itsuseful impuritiesfor use on soils and crops that can profit more from It (for example, sOlls In the cotton belt in the southern United States). II. AGRICULTURE As has been pointed out, agriculture is the productive sector that is most difficult lo organize. For example, in copper mining the problem is basically stagnation in production in a recentlY,and highly capitalized sector. This problem can be solved simply by organi– zlng productlon. In agrlculture, on the other hand, the problem involves decreasíng produc– tlon ín an extremely undercapílalized sector. 233