Mining and the shape of Chile
When looking at a Chilean map one notices that it resembles a long narrow strip of land squeezed between the Pacific Ocean and the high Andes. Looking a little to the southern part, though one immediately wonders why Chile has this little eastern bulge in Patagonia, entailing all of the Strait of Magellan. Well there might be many theories out there, but I believe the ultimate strategic reason why most of Southern Patagonia belongs to Chile is only one – mining.
In itself Southern Patagonia might have very little resources aside from sheep farming and some alluvial gold that was mined in the late 1800s. However, it sits at the intersection of the Atlantic and Pacific Ocean and this makes it a very important location to be in control of. The political and business leaders of young Chile quickly realized that it is crucial to have unhindered access to its European markets, especially for its saltpetre and copper ore products. After all, it was a significant saltpetre producer and ever bigger copper producer, representing 44% of world production by 1869. The latter ore however had to be initially smelted in the UK. Hence, the reliance on the Magellan Straight was paramount and therefore it needed to be secured.
After a first attempt in establishing Fuerte Bulnes in 1843, Chile got a more permanent hold on the area with the foundation of Puerto Arenas on December 18th 1848. The latter location won over the former for its close-by coal deposits. Back then coal became crucial to refuel steam powered sea vessels that started to replace sailing ships. Coal concessions were handed out in 1869 and quickly thereafter a rail link between mine and port was established. At the same time gold was discovered in its coal creek. This drove further development and immigration, but only the establishment of the sheep industry transformed Patagonia, with Punta Arenas as its most important hub. The discovery of alluvial gold on Tierra del Fuega in the early 1880s brought in plenty more immigrants, especially Croatians. This changed the appearance of Punta Arenas from a frontier town to a city that got characterized by numerous European style houses.
While the gold rush did not last long, coal was increasingly mined for export to Argentina. With the opening of the Panama canal in 1914, the strategic shipping location of Patagonia experienced a major blow. It diverted lots of marine traffic away from the Strait of Magellan and therewith away from Punta Arenas. The coal that was mined at Loreto mine close to Punta Arenas was also eventually mined out in 1940. However, that did not mean that there was no coal left in the area. The coal mines Pecket and more recently Invierno continue the coal mining tradition that help to cover Chiles electric power needs. Its economic haydays of the early 1900s are definitely over, but Chile has a persistent strategic interest in securing the area and developing its infrastructure. The establishment of Puerto Williams as a Chilean naval outpost in 1953 and the current program to give it road access are testament to it.
So coming back to the question of why Chile is not restricted to the western part of the Andes with Argentina holding the rest, it all comes back to where export markets for its mining products were in the 1800s – and that was Europe. Access to the Strait of Magellan and thereby to the Atlantic Ocean was paramount. Chile pressed ahead to incorporate Southern Patagonia into its nation to secure the shipping lanes for its mining products. Mining shaped the world once again!