This article looks at the beginnings and early development of the modern copper smelting industry in Chile. It analyses the factors which led to its occurrence, contrasting it with other countries where no smelting industry developed. It argues that the development of the Chilean smelting industry stimulated copper mining and reinforced the expansion of coal mining. Furthermore, it permitted the retention in the country of a larger part of the rent generated by copper mining than would have been the case had all the copper ore been exported, and was therefore an important factor in the development of the Chilean economy as a whole.Until 1879 tne Chilean copper industry was the most dynamic sector of the economy of the Republic. During the period 1844—79 it generated exports of 341 million pesos (around £64 million), or 42.3 % of the total value of the exports of the country, and contributed 29 million pesos, or almost 10% of the ordinary fiscal income, through the export duty levied.1 Most of this copper left Chile in the shape of ingots of over 99% fine (that is pure) copper, bar copper of c. 96 % fine or regulus, a semi-processed form of copper of around 50% fine; only 12.1 % left in the shape of copper ores of different types.2 The smelting and, to an even greater extent, the refining of the copper ore in Chile permitted the miners to develop a wider variety of potential markets. It also facilitated the Luis Valenzuela is a Lecturer at the Centre for Development Studies, University College of Swansea.
Improving the productivity of the copper mining process in the Chilean copper industry