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A History of Gold in Chile by W. A. Cuadra and P. M. Dunkerley
This article is based on one of the same title that was written by P. M. Dunkerley based on research done by both authors and originally published in 1991 in the prestigious American journal 'Economic Geology' Vol. 86, pp. 1155—1173.
 
Abstract
 
Although Chile is less famous as a gold producer than either Peru or Mexico, it was discovered in the quest for gold, its exploration was financed by gold, and in 1810, on the eve of its independence, it was producing as much gold as Peru and Mexico combined.

The ancient Chilean cultures made little use of gold, but during their brief domination of parts of Chile the Incas developed a number of mainly placer mines.

Since the Spanish conquest, there have been four cyclic periods of gold output in Chile. The first was from the founding of Santiago in 1541 to the end of the sixteenth century, when a series of rich alluvial deposits, mainly in the south of the country, produced an estimated 1 to 2 metric tons of gold annually. By the end of this period, the Spaniards had been evicted from their mines and towns by the Mapuche Indians and gold production declined markedly. At this time, the only consistently sizable producer was the Andacollo district.
 
A second period of rising gold production developed from about 1740 onward, largely based on vein mines, from which ore was milled in trapiches and recovered using mercury. Gold mining was encouraged by the establishment of a royal mint at Santiago in 1749, and it peaked at more than 3 metric tons around 1810. Considerable production appears to have come from Andacollo, but it was at this time that the Copiapo area sprang to prominence and other important new districts were discovered at Petorca, Alhue, and El Chivato. A decline set in as a result of the disturbances of the wars of independence, achieved in 1823.
 
The nineteenth century was a time of political turmoil during which silver (e.g., at Chanarcillo), copper, and nitrate mining, and the attractions of the Californian and Australian gold rushes, lured away many of Chile’s gold miners. The most important new gold mine was El Guanaco, which may have achieved an output of 2 metric tons per year. Copper and silver mines commonly generated appreciable by-product gold. In the far south of the country, gold was discovered in Tierra del Fuego and gave rise to a short-lived bucket-line dredging fleet.
 
In 1933 the third cycle of gold production was triggered by the rise in the gold price. Few new districts of any significance were found, an exception being Sierra Overa, but many of the old hard-rock mines were reactivated using modern technology, including flotation and cyanidation. Production peaked at 11.5 metric tons in 1939 before declining to 2 metric tons in 1960. This level was maintained until the liberation of the gold price in 1971 ushered in the fourth, most spectacular, and ongoing surge in production.
 
The El Bronce mine at Petorca was reactivated as a modern production unit, but the momentum of the present period comes from the discovery of a series of subvolcanic, mainly epithermal, gold deposits mostly located at elevations of more than 4,000 m in the Andean Cordillera. El Indio was the first discovery, achieving initial production in 1980. The application of low-cost open-pit mining and heap leaching technology stimulated development or redevelopment of Choquelimpie, El Hueso, Marte, La Coipa, El Tambo, Guanaco, and San Cristobal. Chile’s gold production attained 21.6 metric tons in 1989 and will increase further based on committed projects.

The Spanish Quest for Gold Leads to the Discovery of Chile
 
"Get gold, humanely if you can; but at all hazards get gold.” The letter of King Ferdinand VII of Spain to his colonists in America, dated July 25, 1511 (Helps, 1857), shows clearly the need of the Spanish state for finance to fund its Italian wars, its imports of luxury goods, and the cost of the American conquest itself.
Royal patronage and the driving force of a series of remarkable Spanish adventurers led to the capture and looting of the Aztec empire by Hernan Cortes in 1521 and to Francisco Pizarro’s kidnapping of the Inca king and overthrow of his empire in 1532. Historians have estimated that the Incas gave the Spaniards 7,370 kg of gold for the release of Atahualpa and that a slightly larger amount was stripped by the conquistadores from Cuzco, the Inca capital.
 
Cuzco was too remote to serve Pizarro as a base so he descended to the coast where he founded the city of Lima and from there directed his exploration and settlement activities. Diego de Almagro, who had been a constant companion of Pizarro, moved south from Peru in 1536 to follow up rumors of gold and fertile lands (Diego de Rosales, in Vicuña Mackenna, 1881, p. 10—11) and on the way he intercepted a cargo of gold tribute being sent to Cuzco by the local inhabitants. Although he became the European discoverer of Chile, he returned empty-handed to Peru in 1537 and was killed by Pizarro. Pedro de Valdivia was then sent to resume exploration in the south and penetrated to the fertile Central Valley where he founded the city of Santiago de la Nueva Extremadura, nowadays simply Santiago (Fig. 1), in 1541.
 
Evidence of gold mining in Chile before the Inca conquest
Mainland Chile runs for 4,000 km along the western flank of South America, from the Arica bend to the southern tip of the continent. It is divided into 13 administrative units called Regions, numbered I to XII from north to south, plus the Metropolitan Region of Santiago.

The earliest evidence of a human presence in Chile dates from between 10,000 and 9,000 B.C. (Mostny, 1981, P. 19—23). The oldest record of gold is much more recent however. Occasional gold objects or ornaments, dated at 900 to 500 B.C., have been recovered from burial mounds of the Arica cultures in Region I. These may have been carried into the area from farther north and are considered to be associated with the Chavin culture, the earliest culture recognized in Peru (Tello, in Samame, 1979, p. 5—7). There are several Chilean finds of metal objects, among them gold, from the period 400 to 600 A.D. In Arica, the Tiahuanaco culture of Bolivia has left some metal artifacts (Fig. 2), and in Region II Atacaman burial mounds have yielded gold ornaments, malachite necklaces, and tin objects related to the Tiahuanaco culture. In Region IV, the Molle culture developed near La Serena, and at its height (ca. 665 A.D.) was familiar with metallurgical techniques and may have been the first to exploit mineral deposits within Chilean territory. A later people from this same area (ca. 905 A.D.), the Diaguitas (Fig. 2), developed a relatively sophisticated agricultural economy and left tombs with a variety of copper and bronze objects and occasional gold and silver earrings (Mostny, 1981, p. 119—129). To the south of the Diaguitas were the Araucans, or Mapuches, who controlled Chile as far south as present-day Puerto Montt in Region IX. According to Encina (1947, vol. 1, p. 86) these people did not learn to work metals.
 
Gold in Chile under Inca rule
Around 1200 AD. the Inca dynasty came to power in the Cuzco region of the Peruvian Andes, imposing itself on existing cultures (Fig. 2). Thirteen successive monarchs built one of the most powerful empires known in the Americas. By 1460, Tupac Yupanqui (1471—1493) had conquered Chile as far south as the River Choapa (Region IV) by subduing the Atacamans and Diaguitas (Fig. 2). In 1485 his son, Huayna Capac (1493—1525), penetrated south of the River Maule (Region VIII) but was defeated by the Araucans and established the southern limit of his empire along the valley of the River Maipo, south of Santiago. The chronology of these events indicates that northern Chile experienced Inca domination for only 50 to 75 years before the arrival of the Spaniards.

Metals, especially gold, were of fundamental importance to the Incas. However, the concept of commerce and therefore of a medium of exchange was unknown, and gold had no value to the Incas except as a cult object to be used in the ornamentation of holy places or palaces. They were sun worshipers and probably considered the yellow metal as containing the essence of their deity. The greatest concentration of gold in their empire was in the Temple of the Sun in Cuzco.
 
The Incas probably obtained much of their gold by plundering preexisting cultures, but they were also adept alluvial miners (Mollins, 1937, p. 11—16), a skill they probably learned from the peoples they overran. Studies of pre-Inca peoples have shown a close correlation between the ancient gold cultures and auriferous river systems (Rodriguez, 1986).
Each Inca territory was expected to pay an annual tribute in gold, sent to Cuxco along the Inca roads, in the form of natural alluvial gold, nuggets, or stamped tokens (Frias, 1986, p. 67—70). Inca gold smelters were found by the Spaniards at Coquimbo and Quillota (Encina, 1947, vol. 1, p. 78) and have more recently been found near Valle Hermosa, southeast of Copiapo.
 
The Incas carried out their colonization by implanting, among the conquered peoples, groups of workers who were already skilled in their agricultural and industrial methods. These mitimaes included alluvial and hard-rock gold miners, and according to Encina (1947, vol. 1, p. 78), gold was produced by the Incas at Andacollo, Punitaqui, Choapa, Petorca, Marga Marga, Lampa, Tiltil, and Lolol (Fig. 2).
 
Despite the probability that some Chilean gold was part of that sacked in Cuzco, the proportion of gold of Chilean origin in the Cuzco booty is unlikely to have been very great, because gold production in other parts of the Inca empire had a far longer history than in Chile.

 
Gold in Chile during the Colonial Period (1541—1820)
 
The sixteenth century (1541—1600)
Pedro de Valdivia’s prime objective in Chile was to conquer all the territory down to the Straits of Magellan, not the quest for gold. However he knew that his success in Chile depended on finding sufficient gold to finance the conquest. Therefore in 1541, after he had established Santiago, Valdivia took prisoner a local Indian chief, Michimalongo, and obliged him to reveal the locations of placer gold mines which had been worked to pay the Inca tribute. These were at Marga Marga (Region V) where Valdivia developed the first Chilean gold mine of the Spanish colony (Fig. 2) and where, according to Encina (1947, vol. 1, p. 203), the Spaniards found “many smelters and clay crisoles.” They put to work a labor force of 1,200 young Indian men and 500 women who were provided by the local chiefs (Mariño de Lobera, in Villalobos, 1983, p. 10). At first, production was disappointing and administration poor, but it gradually improved and Marga Marga continued to be a sizable placer gold producer until the end of the sixteenth century. The first shipment of gold, made by Valdivia in 1542, was the fruit of several months work and weighed almost 32 kg, but it was stolen on the way to Peru. A second shipment, of about 100 kg, was dispatched in 1545, but it, too, failed to arrive at its destination and it was only in 1547, when Valdivia personally escorted the Marga Marga gold to Peru, that Chile began to contribute to the Spanish coffers. In general, this period of the conquest was characterized by instability, largely provoked by the reaction of the Indians to the yoke of their new masters.
 
Notwithstanding the initial problems, during the first six years of the Spanish presence in Chile, Marga Marga produced about 1,060 kg of gold and became justly famous. In addition to the reported production, further significant amounts of gold must have been smuggled out of the area by all connected with mining in the new colony (Villalobos, 1983, p. 11).

 
The Inca smelters found in the Coquimbo area (Fig. 2) probably derived their gold from Andacollo (Region IV). The town of La Serena was founded nearby in 1544, sacked by the Indians, and rebuilt in 1549. In 1552, Pedro de Valdivia wrote in a letter to Spain that the only two places from which he had permitted gold to be produced up to that date were Santiago (Marga Marga, or Quillota) and La Serena (probably Andacollo) (Encina, 1947, vol. 1, p.296). Gold smelters had been established in Santiago and La Serena by 1551.
 
However, the Spaniards had continued working their way south from Santiago and around 1552 rich new placer gold mines were discovered at Quilacoya (Fig. 3), near the town of Concepcion (Region VIII), which had been founded in 1550. According to Mariño de Lobera (in Villalobos, 1983, p. 12), up to 20,000 Indians produced as much as 2.3 kg of gold per day at Quilacoya. Additional towns and forts were established and new mines were discovered. La Imperial, founded in 1552, supported the nearby gold workings at Carahue, and Villa Rica—"Richtown" — founded in 1552, is reported to have taken its name from nearby placers (Frias, 1986, p. 91). In 1552 and 1553 forts were set up at Puren, Tucapel, and Arauco (Fig. 3). Gold production increased, marking the first economic cycle (Fig. 4) and justified the establishment of another gold smelter about 1553 at Concepcion (Encina, 1947, vol. 1, p. 450). However, it was in this same year that Pedro de Valdivia was killed in a battle with the Mapuche Indians near the gold washings at Tucapel.
 
During the time of his successor, Hurtado de Mendoza, new placer gold mines were discovered at Madre de Dios near Valdivia, and near Osorno (Encina, 1947, vol. 1, p. 558), probably at Ponzuelos, in 1561 (Fig. 3).
Both Madre de Dios and Ponzuelos became extremely famous, particularly the former. Vicuña Mackenna (1881, p. 64) said that the Valdivia (Madre de Dios) gold “was reputed to be the purest and finest of the Indies.” At Madre de Dios, gold was so plentiful that for a time it was used as a substitute for iron, which had to be imported, for a series of applications such as harnesses (Diego de Rosales in Orrego, 1890, p. 23).
North of Santiago, a series of gold washings were rediscovered by the Spaniards. Andacollo (Region IV), possibly the greatest gold mine of the colony, was definitely operating prior to 1575 (Vicuña Mackenna, 1881) and the rediscovery of mines at Choapa and Illapel (Fig. 3) was made about 1561, at the same time as Madre de Dios.
 
There is good evidence that before the end of the sixteenth century hard-rock deposits were also being mined and the contained gold was recovered in water-powered trapiches (Villalobos, 1983, p. 16—18). These usually consisted of two massive grinding stones mounted vertically on a horizontal axle and turning in a circular stone trough which was plied with water. The ore was crushed between the trough and wheels and the gold recovered by panning, or later, by amalgamation.
 

 
The Spaniards probably did not treat the Indians any more harshly than other colonial powers, and ordinances were made by the king to prohibit their abuse in the gold mines. For example, the Santillan act of 1548 laid down that only one sixth of the Indians in a particular area could be forced to work in mining at any one time, that those working in the placer mines be relieved every four months, and those in the hard- rock mines every two months. Moreover, the Indians were permitted to keep one-sixth of their production and were to be used only in mines close to where they lived (Encina, 1947). However, there is evidence that these ordinances were often not respected.
 
The cost of the conquest of Chile was significant and could not be financed by looting preexisting peoples. Indeed the Mapuche Indians, instead of contributing to the conquest, put up a continuing resistance which prevented the Spaniards from working their gold mines and obliged them to make costly provisions for defense. Nevertheless, during the first 16 years of Spanish settlement, all imports of clothes, arms, soldiers, horses, boats, and other items were financed by gold won from the colony.
 
According to Herrmann (1903), the average Chilean annual gold production for the period under discussion was 1,270 kg.
 
The south of Chile was the chief source of gold at this time, as can be seen from the following figures for the period 1573 to 1577: Santiago (Margamarga and others), 38.9 percent; La Serena (Andacollo and others), 15.2 percent; and the South (Valdivia, Concepcion), 46.0 percent.
 
The alluvial gold mines in the south of Chile were perhaps the first gold mines discovered by the Spaniards in the New World, all previous mines having been taken over from earlier operators. The southern mines were easily worked and extremely rich; however, their exploitation was made difficult because the Mapuche Indians particularly resented being forced to work in them.
 
The Spaniards, like the Incas before them, underestimated the military capability of the Mapuche Indians. Even before defeating and killing Pedro de Valdivia in 1553 there had been ample evidence that the Mapuches were more valiant than the Indians around Santiago or farther south. Fighting continued intermittently throughout the sixteenth century, placing a constant drain on the treasury, and gold mining was frequently disrupted. Finally a serious defeat of the Spanish forces at Curalaba in 1598 (Fig. 3) led to abandonment of the southern towns and the loss of the gold mines. Nowhere in the Americas did the European meet such stubborn resistance to his advance, and some of the areas lost were not recovered until late in the nineteenth century. To comprehend the magnitude of the reverse, seven of the twelve towns in Chile were lost in the space of six years. Valdivia town was abandoned in 1599 and Villarica, Osorno, and Arauco in 1604.
However, gold production in southern Chile was on the wane before these events took place. Encina (1947, vol. 2, p. 228) considered that the declining number of Indian workers (due to war and plagues), disruption caused by fighting, and the regulations limiting the use of Indians in gold mining all had adverse effects. In addition, the richer and more easily accessible deposits would have been considerably depleted by 40 years of production.
 
For Chile as a whole, gold production in 1593 was only 35 percent of that of 1575 (Villalobos, 1983, p. 18), most of it coming from the districts of Santiago and La Serena.
 
 
Curalaba to the establishment of the mint (1600—1743)
The seventeenth century in Chile was a time of great difficulty. The south, with its gold mines, had been lost and the colonists were obliged to finance a series of military and diplomatic campaigns to try to recover parts of the area. This entailed the maintenance of a standing army at a time when there were scant financial resources available, Despite all efforts, no lasting progress was achieved.
 
Official gold production was unimpressive, averaging only 365 kg per year from 1601 to 1740 (Herrmann, 1903), but little information was compiled for this period. As in all times of political turmoil, smuggling was probably rife, and despite royal decrees there was widespread collusion by the authorities.
 
With the demise of the placers, vein gold mining became increasingly important. Among the first mines (Fig. 5) were those at Andacollo, Inca de Oro, Chamonate near Copiapo, Choapa, Tiltil, and Talca. According to Encina (1947, vol. 4, p. 214), the gold discoveries of the seventeenth century were usually small and the activity to which they gave rise was transitory. At Lipangue, six trapiches were installed.
 
According to Vicuña Mackenna (1881, p. 77—80) it was essentially Andacollo that maintained Chile’s gold production during the seventeenth century. For lack of minted coins, many contracts and other public documents of this period defined their financial commitments in “the good gold of Andacollo.”
 
The Chilean economy came to depend largely on agricultural production, much of which was exported to Lima, the capital of the viceroyalty of Peru, and Potosi in present-day Bolivia. Mules were also exported to Potosi to support the logistics of what was then the greatest silver mine in the world. During this period, important copper production was achieved, from mines in the areas of Copiapo and La Serena.
 
In the south, despite all efforts, it proved impossible to resolve the Mapuche question. Periods of relative peace were followed by renewed violence and it was never possible to resume significant gold production in the old mines. Alonso Ovalle, a Jesuit priest, wrote in 1643 that Chile was a country rich in mines, peopled by unconquerable savages who would neither accept civilization nor allow the Europeans to exploit the mine’s riches (Encina, 1947, vol. 4, p. 385).
 
Other difficulties which contributed to the instability of this period were pirate raids all along the coast and a series of devastating earthquakes, one of which demolished Concepcion in 1657.
 
In 1700, with Spain economically and politically bankrupt, the first Bourbon king was called to the Spanish throne. The Bourbons instituted a series of economic reforms based on the French model, which promoted trade and were to have far-reaching consequences in Chile.
 
Gold mining in the Copiapo area (Fig. 5) in the early part of the eighteenth century was so important that it provoked large-scale emigration of the population of La Serena. Much of the gold was won in trapiches, which by this time were employing mercury to improve recoveries. Cerro Capote, to the north of Vallenar, produced so much gold that the entire production from Copiapo came to be called “Capote gold.” It was also in Copiapo that the first stamp mill was installed in Chile, and according to Vicuña Mackenna (1881, p. 83—89), this turned out to be far more productive than the traditional trapiches. However, stamp mills never became important in Chile, whereas the use of trapiches continues to the present day.
 
Other centers of gold production, which were to become increasingly significant (Fig. 5), were Huasco (Region III), Petorca and Alhue (Region V), and Casuto (Region IV), originally a rich placer deposit.
 
 
The mint (1743) and up to the independence movement (1810)
The large number of gold mines operating in Chile at the beginning of the eighteenth century suggests that the official gold statistics may underestimate the real production. This is supported by the fact that in 1732 the city of Santiago applied to the Spanish Crown for permission to install its own mint. Although the Bourbons were keen to boost their income, the king, influenced by the failure of a similar venture in Cuzco shortly before, rejected the project as unattractive. However, Francisco Garcia Huidobro, a Santiago financier, worked out a scheme to establish the mint under license from the crown using his own capital. Since the project involved no risk for the crown, it was accepted, notwithstanding opposition from the vested interests of the viceroy of Peru and the smugglers of Chile. In 1743 Garcia Huidobro obtained the right to erect and the monopoly to operate a mint in Santiago. This event contributed considerably to the creation of a feeling of independence by the peoples of Chile and enabled them to have at their disposal an instrument of economic management.
 
Garcia Huidobro began production of gold coins in 1749, and exactly as he had predicted, officially registered gold production immediately began to increase, doubling and redoubling to 800 kg per year by 1760 (Herrmann, 1903). As part of his agreement with the king of Spain, Garcia Huidobro was allowed to develop a new mining law, which he published in 1754. Business was good for the Basque, who now called himself the Marquis of the Royal House. It was so good that the citizens of Santiago set about removing his privileges and these were abolished, with the connivance of the viceroy of Peru, in 1770.
 
However, administrative reforms and other measures to help mining, which was responsible for three-quarters of the value of Chile’s imports, continued. In 1771 King Charles III reduced the gold royalty from 20 percent to 3 percent and in 1787 a mining court was established to resolve the innumerable title disputes. Manufacture of gunpowder commenced in Chile in 1788 (Mendez Beltran, 1979) and investments were made at Punitaqui (Fig. 6) in a vain attempt to produce mercury domestically (Encina, 1947, vol. 5, p. 310). Mining credits were established and in 1792 mining supplies were exempted from import duties. In the same year the discoverer of a mine was awarded the adjacent claim that had formerly been reserved for the king. These events promoted and accompanied the second major cycle of gold production in Chile (Fig. 4), which was interrupted by the turmoil of the independence process at the start of the nineteenth century.
According to the new mint, run by the Crown, gold production averaged 3,110 kg in the first decade of
the nineteenth century, an all-time official record for Chile.
 
By this time goods were allowed to be shipped to Chile through the Straits of Magellan, instead of having to go through Central America and Peru. This made iron and other imports much cheaper and allowed many of the older mines to be reactivated. At the end of the century 253 permanent mines and placers existed, and there were a large number of locations in the south of the country where placer working was used to supplement income on an occasional basis (Encina 1947, vol. 5, p. 311). The ancient mining center of Andacollo was very active at this time (Encina, 1947, vol. 5, p. 304) and other major centers were Tiltil, Peldehue, Petorca, and Copiapo (Fig. 6). The most famous mine at Petorca was Bronce Viejo, forerunner of El Bronce de Petorca, which is known to have been worked in 1770 and which was, until recently, Chile’s second most important gold mine.
 
The Alhue mining district (Metropolitan Region) was discovered about 1739 (Fig. 6) and was worked intensively until at least the end of the century. Quantities of wornout trapiche stones testify to the importance of this area. Farther south, the main vein of the old El Chivato mine (Region VII) was discovered in 1767 (Encina, 1947, vol.5, p.311). A series of underground workings encountered very rich ore which was produced until about 1797, when the mine was abandoned at the water table.
 
However, the most important center of gold production in Chile during the eighteenth century was Copiapo (Fig. 6), where five important gold districts (Las Animas, Cachiyuyo, Tierra Amarilla, El Plomo, and Chamonate), five smaller districts (San Cristobal, Zapallar, Cerro Blanco, Remolinos, and Bodega), and a number of isolated mines were discovered (Encina, 1947, vol. 5, p. 312).
 
From the time of Columbus until the discovery of gold in California in 1846, Latin America was by far the most important source of gold in the world. At its peak, in 1750, it has been estimated that Latin America was producing about 20 metric tons of gold per year, more than 80 percent of the total output. As described above. Chilean production peaked rather later (from 1800 to 1810), and at this time, on the eve of its independence, Alejandro von Humboldt (in Vicuña Mackenna, 1881, p. 180) estimated Chilean gold production to exceed that of Peru and Mexico combined (Encina, 1947, vol. 4, p. 423). Chilean production accounted for about 24 percent of the Hispanoamerican total and was second only to that of Granada (essentially Colombia and a large part of Venezuela).
 
From Independence (1810) to Thirty-Five Dollar Gold (1933)
The political currents sweeping the world after the United States obtained independence (1776) fomented the French Revolution in 1789 and brought Bonaparte to power. As a result of his Spanish campaign of 1808 to 1813, Napoleon imprisoned Fernando VII of Spain. Governing councils, loyal to the king, were set up in the Spanish colonies, but among intellectuals this was an opportunity to throw off Spanish hegemony and attain independence. In Chile, the process began in 1810 and ended in 1823. Fighting continued, however, until 1826 when the Spaniards were expelled from Chiloe (Region X; Fig. 7). Thereafter, other events disturbed the peace in Chile. There was a war against a Peruvian-Bolivian alliance from 1836 to 1839, revolutions in 1851 and 1859, and a war against Spain from 1865 to 1871. From 1879 to 1883 Chile fought the Pacific War against Peru and Bolivia, which resulted in it incorporating into its territory the areas now included in Regions I and II (Fig. 1).

Table 1: Quantity of Gold Used for Coinage by the National

Mint in the Period Following Independence (1822-1830)

(from Vicuña Mackenna, 1881)

 YearGold production (kg)
1822890
1823529 
1824319 
1825265 
1826298 
182765 
1828130 
 1829

Without coinage 

1830

94.3 

 
 In the south, the struggle against the Mapuches finally ended with the recovery of Villa Rica (now Villarrica) in 1883 (Fig. 7). A short civil war followed in 1891.
 
The wars of independence seriously affected gold mining in Chile (Fig. 4). The able-bodied men took up arms and the capitalists fled or went underground as gold exports were prohibited and mining supplies, especially gunpowder, became difficult to obtain. Production fell dramatically and in 1829 no coins at all were stamped at the mint (Table 1). However, practically all the new republic’s imports had to be paid for from the sales of gold, silver, and copper so that efforts were made to encourage mining.
 
Gold exports were again legalized in 1826 and production began to recover in 1832 after the mint had increased its prices. According to Encina (1947, vol. 11, p. 542), 418 hard-rock mines and alluvial workings were active in the decade from 1831. The main mines were located at Petorca, Casa Blanca, and Rere (Fig. 7).
The instability of the period and a prohibition on the exporting of gold promoted smuggling. British consuls in Coquimbo (Region IV) estimated that 21,040 kg of gold were smuggled out of Chile between 1804 and 1830 (Soetbeer, in Herrmann, 1903), and a similar level of activity probably continued throughout much of the century.
 
Encina states that practically no new gold mines were discovered in Chile during the nineteenth century, and the emphasis in mining turned largely elsewhere (Fig. 8). A series of bonanza silver mines were discovered (e.g., Cachinal, 1822; Arqueros, 1825; Chañarcillo, 1832; Tres Puntas, 1848; Caracoles, 1871) and many Chilean gold miners transferred their skills to extraction of the new metal. Lomas Bayas (Region III) and Condoriaco (Region IV) were two important silver mines of this period which contained a small amount of gold (Fig. 7); between 1868 and 1880 Lomas Bayas yielded 160,000 kg of silver bullion containing about 1 percent by weight of gold.
 
Because of the favorable location of the port of Valparaiso, it was easy for Chilean miners to rush to
the gold areas of California (1849), Victoria in Australia (1851), the Fraser River, Canada (1858), and New Zealand. According to Vicuña Mackenna (1881 p. 226), the rush to California from Chile was so great that in 1849 and 1850 there were insufficient boats available to satisfy the demands for transportation.
Copper had been worked in Chile since before the conquest, from rich oxide zones, but copper production became increasingly important from the first years of the nineteenth century (Fig. 7) when Charles Lambert introduced reverberatory furnaces at La Serena and proved that the sulfides could also be worked. As the industrial revolution increased demand, a series of fabulously rich vein mines of the Coastal Cordillera were developed, including La Higuera, Brillador, and the incomparable Tamaya. Some of the copper mines had important precious metal credits.
 
Finally, from the time of the Pacific War, most capital available for new projects in Chile was destined for the lucrative nitrate fields in the far north (Fig. 7). The impact of this activity, whose greatest output was achieved in 1928 (Weisser, 1990), was such that Chile became practically a monoproduct economy.
 
As a result of all these events, between 1851 and 1880 Chilean gold production dropped to less than 500 kg per year. However, the Chilean miner always had an eye for a gold prospect, and toward the end of the nineteenth century several important new deposits were discovered, notably El Guanaco in 1887 and San Cristobal (Fig. 7). El Guanaco was exploited intensely by up to 200 individual mines from its discovery until 1928 and was the most important Chilean gold district of its day. Grades in the oxide zone were initially extremely high and it is likely that supergene enrichment had taken place (Sillitoe, 1991). According to Silva (1983, p. 100), El Guanaco may have produced up to 2,000 kg of gold per year and there are other reports of production ranging from 30 to 50 kg per week.
 
The basic cyanidation process was patented in 1887 and applied in the Witwatersrand gold fields in 1894. The process had reached Chile before 1915 (Lamb, 1915) and an interesting description of its use at the Las Vacas mine (Region IV) was given by Pope (1915). Other mines active at this time were Curacavi, Talca, and Cueca (Fig. 7).
 
Although the Californian gold rush robbed Chile of many of its miners, the technology in hydraulicking and dredging which was developed there was later exported to Chile. Indeed many parallels were drawn between the geology of Chile and California, which remain of interest today. American capital was used to finance a hydraulicking operation at Catapilco (Region V) in 1878 but with uncertain results. Dredging was also tried, at Las Dichas (Region V) and in Patagonia (Region XII), as described below.
 
However, despite the advent of modern technologies and a currency which was devaluing as a result of the nitrate crisis (Lamb, 1915), gold mining in Chile from 1900 to about 1932 was generally in decline (Fig. 4).
 
Gold in Patagonia
Chilean Patagonia (Region XII) has always been an area isolated from the rest of the country, but interest in it was kindled by widespread placer gold discoveries made on the mainland, the island of Tierra del Fuego, and on lesser islands, from 1868 onward (Fig. 9). In 1883 there were 134 active workings producing nearly 100 kg of gold per month (Martinic, 1982). The activity produced immigration into the area, notably of Yugoslavians, and Punta Arenas grew to serve the local industry. Both river gravels (e.g., Rio de las Minas near Punta Arenas) and marine beach deposits (e.g., Cape Virgins) were worked, the latter commonly small, rich, and transitory (Penrose, 1908).
 
The 1902 to 1903 season saw the production of 140 kg of gold by nearly 300 men in Tierra del Fuego. In 1903 the Sutphen Gold Vanning Company was formed and acquired a series of properties on the Oro, Verde, and Oscar Rivers (Fig. 9). From 1905 to 1908 the company commissioned four bucket-line dredges, and in the 1907 to 1908 season achieved a production of 2 kg of gold per week. The initiative of the Sutphen enterprise was followed by the establishment of a series of other companies funded by both local and foreign investors. In 1907 12 dredges were in operation and the area was sufficiently famous that it was visited by the Chilean president.
 
The dredges were steam powered with continuous bucket lines for high-capacity digging and represented state-of-the-art technology (Fig. 10). However, the returns achieved by the dredges seem to have been disappointing and none was operating by 1910. The gold in the area derived from the reworking of auriferous glacial deposits, and although widely dispersed, no really large concentrations were ever found. Many of the ventures were extremely speculative and were based on a wholly inadequate evaluation of the deposits upon which they were founded (Uribe, 1982).
 
From 1933 to 1971

The period following the Great Depression saw a 70 percent rise in the dollar gold price and enormous devaluation of the Chilean peso. This radically changed the cost structure of the industry which combined with the abundance of available labor, particularly in Chile as a consequence of the collapse of the nitrate industry, to produce a resurgence of gold production, and hence, Chile’s third gold cycle (Fig. 4). Backed by the first National Gold Plan (Weisser, 1990), production peaked at a new all-time high of 11.5 metric tons in 1939 and then declined steadily to less than 2 metric tons in 1960. Most of the new production came from the reopening or reworking of the former gold mines in the old mining districts with the application of modern technology. Some of the most productive of these were Andacollo (Koeberlin, 1938), Petorca, El Guanaco, Inca de Oro, Punitaqui, El Capote, Alhue, Chancon, El Chivato, and Pichidegua (Fig. 11). The gold price remained artificially fixed at US$35/oz, but costs rose and high-grade ore was exhausted. During the 1940s and 1950s the mines were forced, one by one, to close.
 
Some new discoveries were made during this period (Fig. 11). The Sierra Overa district (Region II) was the most famous, but interesting vein deposits were also found at Flor and Reserva in the Sierra Esmeralda district.
 
Gold as a by-product of copper mining
Despite waning during the 1940s and 1950s, Chilean gold production never dropped below about 2,000 kg per year, because of by-product gold from the country’s copper mines (Fig. 12). The large porphyry copper deposits, especially Chuquicamata (Region II), Potrerillos (Sillitoe, 1991), and Salvador (both in Region III), were important sources of byproduct gold, and many smaller copper veins and disseminated deposits, especially those near Copiapo, such as the Galleguillos vein or the Ojos del Salado bodies, are notably auriferous.
 

Table 2: Chilean Gold Production (in kg) from Gold Mines and Copper-Gold Mines, 1970-1977 (from Llaumett, 1980)

  Small and medium gold minesSmall, medium and large copper mines  
Year123Subtotal45SubtotalTotal

1970

269 283 300 1039 1339 1622 
1971581 586 296 1695 1991 2577 
19721036 1037 887 1018 1905 2942 
1973175 1229 1409 880 936 1816 3225 
197412 479 728 1219 1085 1404 2489 3708 
197571 837 908 1816 876 1305 2181 3997 
1976129 803 893 1825 1081 1112 2193 4018 
197720 426 665 1111 1216 1224 2440 3551 
197819 278 532 829 1119 1116 2325 3064 

Notes:1 = metallic gold from placers; 2 = amalgamated gold and bullion bars; 3 = gold in ores and mineral concentrates;

4 = gold as a by-product of the large porphyry copper mines, as concentrates, blister, dore metal, and anode slimes;

5 = gold bars from small and medium copper mines.

 
Gold production as a by-product of copper deposits is therefore of considerable importance to the country. Chuquicamata began producing sulfides in 1915 and Potrerillos in 1927. Table 2 shows the relative contributions of gold from small and medium copper mines on the one hand and the large porphyry copper deposits on the other.
 
 
The Present Boom
 
The latest wave of interest in Chilean gold commenced when the US$35/oz price became unsustainable in 1971 and moved up to a peak of over US$800/oz in January 1980. Production rose slowly as small operators responded to the changing economics, and by 1989, most of the old auriferous tailings had been retreated and almost all the old placer deposits had been reactivated by artisan workers under an imaginative state-sponsored scheme. However, what caused a real leap in Chilean gold production to all-time highs (Fig. 4) was the discovery of important epithermal and subvolcanic gold deposits, which are described in this volume.
 
This final phase in the history of Chilean gold began in 1974 when the potential of gold-silver-copper-arsenic mineralization of epithermal type in the El Indio area of northern Chile (Fig. 12) was first recognized (Llaumett and Henriquez, 1976). The low copper prices of the early 1980s maintained and reinforced the interest in Chilean gold. Production at El Indio was achieved in 1980, but the mine came fully on stream in 1981. The spectacular grades at El Indio did much to encourage exploration for gold in Chile. El Indio's early development was conventional - underground mining and processing by flotation and cyanidation - but it has taken the application of open-pit mining and heap leaching techniques to bring many of the other Chilean high-level deposits into production.
Notes: 1 = metallic gold from placers; 2 = amalgamated gold and bullion bars; 3 = gold in ores and mineral concentrates; 4 = gold as a by-product of the large copper mines, as concentrates, blister, dore metal, and anode slimes; 5 gold bars from small and medium copper mines production.
 
The combination of favorable technical, geologic, economic, and investment conditions led to the exploration and development or redevelopment of such important bulk mineable gold deposits as Choquelimpie, La Coipa, El Hueso, Tambo, Marte, San Cristobal, and El Guanaco (Fig. 12; Sillitoe, 1991). The ancient El Bronce vein mine at Petorca was reactivated extremely successfully and there are other important vein deposits which entered production recently at Alhue, La Pepa, Las Palmas, and Faride (Fig. 12). Additional important projects are undergoing evaluation at Andacollo, in the Maricunga province at Lobo and Refugio, and in the south of the country at Fachinal, near Chile Chico (Fig. 12).
Chile now produces 10 percent of the gold from Latin America and is this region’s third largest producer. The 1989 production of 21.6 metric tons (Fig. 4) is expected to rise for several years and should place Chile among the world’s leading gold-producing countries.
 
Acknowledgments
 
The authors would like to thank former colleagues of Shell Chile, particularly G. Ossandon and C. Vieira. We are also grateful to those who have contributed to the preparation of this paper, especially P. Jamett for help in typing, R. Valdez, S. Araya, and P. Alarcon for drafting the figures, and J. Riquelme and G. W. Bossard for innumerable helpful comments on the manuscript.
 
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