Mining Company Interests and Foreign Countries
The nationalization of copper in 1971 has been one of the most important decisions in the economic and political history of Chile. It occurred in a context of conflict between the interests of foreign mining companies and the country. While Chile sought to use copper mining as its “cornerstone for development”, the domestic industry lost weight on the world market and, worse, the contribution of large-scale mining to the national economy was weak, dominated by perception enclaves that were not able to drive the development of paisley nationalization was a radical response, under a social and political context peculiar to the country’s history, that sought to increase state control in an industry considered strategic. Today it is possible to note that in significant respects, the objectives of nationalization were reasonably achieved. Chilean copper production reversed its downward trend and began a gradual increase from 11% of total world production in 1971 to 17.7% in 1990, which began producing the new era of large-scale private mining.
The other aspect of great importance that the nationalization was allowed the development of national capacities related to mining, mainly through human capital formation, accelerating national technological learning has been sustained not only the production in state hands, but also the great expansion of private mining in Chile since the 90′s. La Corporation del Cobra de Chile (Codec), formed in 1976 to concentrate management sites in a single nationalized company has been a vector of technological development in the country, topping the record of industrial patents. Also through sales management Codec managed to learn and efficiently control the marketing of copper and its byproducts, from a few years to play a leadership role in the global market.
On the other hand, the institutional framework of Codec reported very few changes since its creation, which, along with a diminishing role of the owner, was generating a sub-optimal compromise with their financing needs and insufficient framework for action to address major issues of development, especially in recent years, the world copper market has undergone structural changes which require a faster growth.
That’s why the corporate governance reforms adopted in 2009 are of such historical importance, as they offer a new institutional framework that can help the company overcome its current challenges and push it towards a better future.
Between 1976 and 2010, Codec contributed surplus of over U.S. $ 62 billion, about 12% of the country’s fiscal revenue, which has been a fundamental basis for social action of the state. The big challenge is to empower the company to become the flagship of the internationalization of Chilean mining, maximizing production capacity and efficiency, thus multiplying the contributions he has been able to generate for Chile.