“We cannot change our past. We can only learn from what we have lived through,” states a plaque in the museum, placed in 2010, 20 years after the return to democracy.
It helps that Chile is by far the most prosperous country in Latin America, largely thanks to a strong mining sector and robust foreign investment over several decades.
That investment features many Australian mining and mining services businesses.
BHP, a long-established player in the country’s vast copper industry, is Chile’s biggest corporate taxpayer.
About 200 Australian companies operate in Chile today – including mining giants such as BHP and Rio Tinto, mining services companies such as Worley and Orica and a range of smaller players in areas ranging from renewable energy to wine to agriculture.
Chile’s main newspaper ran a front-page story last week announcing Google’s new 14,800 kilometre underwater cable that will “unite” the country of 20 million with Australia.
BHP, a long-established player in thecountry’s vast copper industry, is Chile’s biggest corporate taxpayer. Until recently, Rio Tinto has been far less active in Latin America despite being the world’s second-biggest miner. Its huge bet on lithium has quickly altered that – coinciding with a move into lithium by Codelco, Chile’s state-owned mining giant that previously focused on copper. Last month, Rio signed ajoint-venture agreement with Codelcoand a similar one with Enami, a smaller state-owned miner, to develop two lithium projects in Chile, complementing Rio’s lithium mines across the border in Argentina. It has another exploration agreement for a potential copper mine with Codelco.
And despite having higher costs than other Latin American countries, Chile is still much less expensive than Australia. Wages for experienced mine employees, for instance, average around $US4000 ($6145) to $US5000 a month, while energy is relatively cheap.
Codelco’s president of the board, Maximo Pacheco, also points to the appeal of Chile’s rule of law, its strong institutions and its well-developed mining ecosystem.
“That’s very important in a sector which invests for the long term,” he says.
Codelco also conducts joint research programs with the University of Queensland through its Sustainable Minerals Institute.
“We are very happy about our close relationship with Australia,” Pacheco says. “Our challenge every day is to increase it.”
Given the similarity of the two economies, trade flows are reasonably modest – Chile imported around $900 million worth of goods and services from Australia over the past financial year, while Australia imported about $630 million of Chilean goods and services. Australia’s main earners were coal andChilean studentscoming to the country. And Australia’s top imports were travel services and fruit.
But Chile’s mining-based economy,linked to China’s demand growth, is not the only overlap with Australia.
Comments from Chilean business about the need to reduce red tape and corporate taxes to encourage investment and stimulate productivity and economic growth sound identical to the views of the Business Council of Australia.
Chilean government strategies aimed at adapting to the global energy transition and trade on the country’snatural advantages in renewablesand critical minerals could have come from Anthony Albanese’s office.
Chile has strong ties to the US, but programs and business plans aimed at gender equality and social inclusion have certainly not been stopped by Donald Trump’s anti-DEI agenda.
Chile’s female minister for mines, Aurora Williams, likes to say mining starts with M for mujeres – Spanish for women. BHP likes to boast that its Chilean workforce is 44 per cent female.
That is about double the average of Chile’s mining industry as a whole. Yet BHP is merely leading the way in a country that seems as closely aligned to progressive European customs and thought as it is to its Latin American compatriots and any remnants of machismo tradition.
Not that the process is always smooth. Chile’s current president, **riel Boric, was elected in 2021 as a candidate of the far-left following riots in 2019 over social inequity, transport fares and an inadequate pension system.“If Chile was the cradle of neo-liberalism, it would also be its tomb,” Boric declared.
But the reality of government quickly tempered his radical ideas into those of a more typical moderate social democrat leader. Boric will leave office in November with a raft of modest reforms in areas such as pensions and the minimum wage. But he will leave a pro-market, pro-free trade, pro-foreign investment and pro-mining agenda intact.
Despite the inevitable rise of right-wing populists leveraging anti-immigration sentiment and linked concerns about rising crime, an older, moderate conservative woman is the favourite to win the presidential election. The country remains drawn to the centre.
But what will matter most for Chile’s future is the continued strength of its economy. In contrast to Australia’s 0.5 per cent decline in real GDP per person last year, Chile’s increased 2.5 per cent.
It is the first country in Latin America to be close to achieving developed economy status. That also means sharing lower growth rates of around 2 per cent compared to 5 per cent rates common in Chile a decade ago.
The bet on the energy transition and critical minerals driving economic momentum is part of the government’s answer. Northern Chile’s arid climate, altitude and sun exposure means its solar power is unmatched, while wind farms are ubiquitous in the south of this narrow country that hugs more than 4000 kilometres of coast but is only 175 kilometres wide on average. It also has considerable hydroelectric power in the south.
Last year, 70 per cent of electricity generation came from renewable sources. The buses in Santiago, a city of 7 million, are all electric.
But like Australia, the reliablilty and stability of a power network moving away from coal and gas is fraught. Chile’s national system suffered a major blackout in February, and the military was called out to patrol the streets of the capital.
Just like Australia, the government has a green hydrogen strategy as part of its effort to replace fossil fuels. Just like Australia, this remains more ambition than reality until advances in technology and lower costs overwhelm customer reluctance to pay more for it.
Welcome to a shared future – even if most Australians not involved in mining don’t register the significance of all those parallels.
