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Chilean nationalization of copper
The nationalization of the Chilean copper industry, commonly described as the Chilenization of copper (Spanish: Chilenización del cobre) was the process by which the Chilean government acquired control of the major foreign-owned section of the Chilean copper mining industry. It involved the three large world-class mines known as 'La Gran Mineria' and three smaller operations. The Chilean-owned smaller copper mines were not affected. The process started under the government of President Carlos Ibáñez del Campo (1952–1958), and culminated during the government of President Salvador Allende (1970–1973), who completed the nationalization. This "act of sovereignty" was the espoused basis for a later international economic boycott, which further isolated Chile from the world economy, worsening the state of political polarization that led to the 1973 Chilean coup d'état.[citation needed]
Concurrent with the nationalization of copper there was also a nationalization of steelmaking and iron mines in Chile in 1971.
By the late 1950s, the three principal copper mines in Chile were Chuquicamata, El Salvador, and El Teniente. Chuquicamata and El Salvador were owned by the Anaconda Copper Company and El Teniente was owned by the Kennecott Copper Corporation. The La Exotica mine, an adjunct of Chuquicamata, was added to these big mines in 1966. These large mines were mainly self-contained and self-sustaining settlements with their own cities to house their workers, their own water and electrical plants, their own schools, stores, railways, and even in certain cases their own police forces.
Three other mines were eventually nationalized, Cerro de Pasco's Andina operation, which went to Codelco, and the two mines, Los Bronces and El Soldado, owned by Peñarroya's Disputada de las Condes, which were bought by ENAMI. Evidently these mines did not fit in with ENAMI's plans and Disputada de las Condes was subsequently sold (at a substantial profit) to Exxon Minerals.
On June 26, 1969, President Eduardo Frei Montalva signed an agreement with the Anaconda Copper Company, the Kennecott Utah Copper company, and the Cerro company (which was afterwards ratified by Congress). In this agreement, the government acquired the 51% of the Kennecott’s shares and 25% of the shares in both Anaconda and Cerro, allowing the U.S. to maintain some level of control in this economic sector.
This process was known as "negotiated nationalization", and was designed to avoid a conflict with international investors (and ultimately with the United States) and to allow for the acquisition of the technical, financial and marketing knowledge of the multinationals. A similar process was used to acquire a dominant ownership over the rest of the copper industry.
In the agreement, it was established that the Chilean government could buy within the next 13 years (counting from 1970) the remaining 49% of the foreign ownership from the multinational corporations, but only after having paid at least 60% of the current debt due from the purchase of the original 51%. It also fixed a clear formula for the valuation of the assets to be bought, for the liquidation of profits, for the increase of direct investment in new works, and related issues.
The process of "negotiated nationalization" met with vociferous criticism from the leftist political parties, and from a section of the President's own Christian Democratic Party. The idea was accused of bowing to American imperialism, being too slow and too expensive.[citation needed]
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Chilean nationalization of copper
The nationalization of the Chilean copper industry, commonly described as the Chilenization of copper (Spanish: Chilenización del cobre) was the process by which the Chilean government acquired control of the major foreign-owned section of the Chilean copper mining industry. It involved the three large world-class mines known as 'La Gran Mineria' and three smaller operations. The Chilean-owned smaller copper mines were not affected. The process started under the government of President Carlos Ibáñez del Campo (1952–1958), and culminated during the government of President Salvador Allende (1970–1973), who completed the nationalization. This "act of sovereignty" was the espoused basis for a later international economic boycott, which further isolated Chile from the world economy, worsening the state of political polarization that led to the 1973 Chilean coup d'état.[citation needed]
Concurrent with the nationalization of copper there was also a nationalization of steelmaking and iron mines in Chile in 1971.
By the late 1950s, the three principal copper mines in Chile were Chuquicamata, El Salvador, and El Teniente. Chuquicamata and El Salvador were owned by the Anaconda Copper Company and El Teniente was owned by the Kennecott Copper Corporation. The La Exotica mine, an adjunct of Chuquicamata, was added to these big mines in 1966. These large mines were mainly self-contained and self-sustaining settlements with their own cities to house their workers, their own water and electrical plants, their own schools, stores, railways, and even in certain cases their own police forces.
Three other mines were eventually nationalized, Cerro de Pasco's Andina operation, which went to Codelco, and the two mines, Los Bronces and El Soldado, owned by Peñarroya's Disputada de las Condes, which were bought by ENAMI. Evidently these mines did not fit in with ENAMI's plans and Disputada de las Condes was subsequently sold (at a substantial profit) to Exxon Minerals.
On June 26, 1969, President Eduardo Frei Montalva signed an agreement with the Anaconda Copper Company, the Kennecott Utah Copper company, and the Cerro company (which was afterwards ratified by Congress). In this agreement, the government acquired the 51% of the Kennecott’s shares and 25% of the shares in both Anaconda and Cerro, allowing the U.S. to maintain some level of control in this economic sector.
This process was known as "negotiated nationalization", and was designed to avoid a conflict with international investors (and ultimately with the United States) and to allow for the acquisition of the technical, financial and marketing knowledge of the multinationals. A similar process was used to acquire a dominant ownership over the rest of the copper industry.
In the agreement, it was established that the Chilean government could buy within the next 13 years (counting from 1970) the remaining 49% of the foreign ownership from the multinational corporations, but only after having paid at least 60% of the current debt due from the purchase of the original 51%. It also fixed a clear formula for the valuation of the assets to be bought, for the liquidation of profits, for the increase of direct investment in new works, and related issues.
The process of "negotiated nationalization" met with vociferous criticism from the leftist political parties, and from a section of the President's own Christian Democratic Party. The idea was accused of bowing to American imperialism, being too slow and too expensive.[citation needed]