BETWEEN the Pacific Ocean and the Andes Mountains is a narrow stretch of country that is Chile. Maritime transportation was once the only practical means of logistics around the country, and its vast coastline is home to the busiest port on South America’s west coast.
Chile’s most significant export destinations in 2019 were China, the US, Japan, South Korea and Brazil. Most of its imports were from the US, China, Brazil, Argentina and Germany.
A free trade agreement between Australia and Chile came into force in 2009. The Australian Trade and Investment Commission describes the agreement as the most comprehensive FTA Australia has negotiated with another agricultural producing country since 1983, when Australia signed the Closer Economic Relations Agreement with New Zealand.
In the 2021-22 financial year Australia’s biggest goods exports to Chile were coal, civil engineering equipment, measuring and analysing instruments and electrical circuits equipment. Our total exports to Chile came to $1.28 billion.
And Chile’s biggest exports to Australia that year were copper and other ores and concentrates, fruits, wood and paper. Australia imported $571 million worth of goods and services from Chile over that same period.
Britannica highlights Chile’s length and physical barriers as constraints to traffic flow, positioning the sea as the only expeditious means of transportation.
Chile took advantage of maritime transportation during the 19th century when it owned one of the largest merchant fleets in Latin America. The merchant fleet shrunk as the nation’s economy declined in the early 20th century and as overland transport replaced maritime transport. Eventually, only international transport was conducted by ship.
The port of San Antonio is the largest port in Chile and the busiest on South America’s west coast. San Antonio International Terminal and DP World San Antonio handle the port’s containerised cargo. San Antonio is also an intermodal hub, connecting the city to Chile’s southern hinterland and neighbouring country Argentina.
Chile’s second busiest port is the Port of Valparaíso, an important facility for commercial shipping as well as cruise activity. It receives the highest number of passenger arrivals in Chile and ranks second in the country for container handling volumes.
According to the International Trade Administration, the Port of Valparaíso is in the process of developing its Terminal 2 project. The project aims to add one million TEU of capacity by 2030. Once the expansion has been completed, Terminal 2 would allow the ports in the Valparaíso region to maintain adequate levels of occupancy while an outer port at San Antonio is being built as part of a separate project.
The goal of the San Antonio project is to provide additional capacity through an offshore port extension, which would provide two berthing fronts around 1.5 kilometres long, with a transfer capacity of around 3 million TEU each.
Other ports such as Antofagasta and Arica serve Chile’s trade with Bolivia. The ports of Chañaral, Huasco, Guayacán and Tocopilla export minerals, and the port of Talcahuano serves the industrial complex of Concepción.
Chile is one of the world’s largest lithium producers, second only to Australia, which overtook the South American nation six years ago. However, Chile holds the world’s largest lithium reserves.
In April this year, Chilean president Gabriel Boric announced intentions to nationalise the country’s lithium industry and create a state-owned company to produce it.
Reuters wrote that nationalisation of the lithium industry would transfer control of Chile’s lithium operations from industry giants Albemarle and SQM to a separate state-owned company. Reuters noted the announcement came as electric vehicle makers struggle to secure battery materials while countries move to protect national resources.
“This is the best chance we have at transitioning to a sustainable and developed economy. We can’t afford to waste it,” Mr Boric said in an address televised nationwide, quoted by Reuters.
Mr Boric said future lithium contracts would only be issued as public-private partnerships with state control, and that the government would not terminate current contracts, but hoped companies would be open to state participation before they expire. SQM’s contract is set to expire in 2030 and Albemarle’s in 2043.
This article appeared in the August 2023 edition of DCN Magazine