If tropical Latin American nations have been “banana republics,” 20th-century Chile was a “copper republic,” and mining remains its major foreign exchange earner. For 2005, copper revenues approached US$20 billion and accounted for about 44 percent of all exports. Skyrocketing prices, from US$0.82 per pound in 2000 to more than US$3 per pound by mid-2006 because of strong Chinese demand, have fortified the economy; reliance on a single commodity, though, also means vulnerability to international fluctuations.

Copper’s share of total exports has dropped by half since the early 1970s but has remained stable since the early 1990s. Private mining companies now outproduce Codelco, the powerful state copper corporation, but even Pinochet’s dictatorship dared not privatize Codelco—likely because the law designates 10 percent of its profits to the military.

Mining as a whole accounts for about 13 percent of GDP; other minerals include iron ore, nitrates, precious metals, lithium, and molybdenum. The greatest mines are in the Norte Grande—Chuquicamata is the world’s largest open pit mine, but others of more recent vintage are making substantial progress. El Teniente mine east of Rancagua is the world’s largest subsurface mine.

Other industrial activities include mineral refining and metal manufacturing, food and fish processing, forest products industries including paper and wood, and textiles. In addition to Santiago, the main industrial centers are the Concepción–Talcahuano and Valparaíso–Viña del Mar conurbations.