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Gold Mining In Chile
Gold mining in Chile dates back to the end of the sixteenth century during the Colonial Period (1541- 1820) when Pedro de Valdivia’s prime objective in Chile was to conquer all the territory down to the Straits of Magellan, not the quest for gold. However he knew that his success in Chile depended on finding sufficient gold to finance the conquest. Therefore in 1541, after he had established Santiago, Valdivia took prisoner a local Indian chief, Michimalongo, and obliged him to reveal the locations of placer gold mines which had been worked to pay the Inca tribute. These were at Marga Marga (Region V) where Valdivia developed the first Chilean gold mine of the Spanish colony and where the Spaniards found “many smelters and clay crisoles.” They put to work a labour force of 1,200 young Indian men and 500 women who were provided by the local chiefs. At first, production was disappointing and administration poor, but it gradually improved and Marga Marga continued to be a sizable placer gold producer until the end of the sixteenth century. The first shipment of gold, made by Valdivia in 1542, was the fruit of several months work and weighed almost 32 kg, but it was stolen on the way to Peru. A second shipment, of about 100 kg, was dispatched in 1545, but it, too, failed to arrive at its destination and it was only in 1547, when Valdivia personally escorted the Marga Marga gold to Peru, that Chile began to contribute to the Spanish coffers. In general, this period of the conquest was characterized by instability, largely provoked by the reaction of the Indians to the yoke of their new masters.
Notwithstanding the initial problems, during the first six years of the Spanish presence in Chile, Marga Marga produced about 1,060 kg of gold and became justly famous. In addition to the reported production, further significant amounts of gold must have been smuggled out of the area by all connected with mining in the new colony.
Gold smelters had been established in Santiago and La Serena by 1551.
However, the Spaniards had continued working their way south from Santiago and around 1552 rich new placer gold mines were discovered at Quilacoya near the town of Concepcion (Region VIII), which had been founded in 1550. According to Mariño de Lobera up to 20,000 Indians produced as much as 2.3 kg of gold per day at Quilacoya. Additional towns and forts were established and new mines were discovered. Gold production increased, marking the first economic cycle and justified the establishment of another gold smelter about 1553 at Concepcion. However, it was in this same year that Pedro de Valdivia was killed in a battle with the Mapuche Indians near the gold washings at Tucapel.
By the end of this period the Spaniards had been evicted from their mines and towns by the Mapuche Indians and gold production declined markedly.
When the second period of gold mining activity began in 1740, gold was extracted from veins. Gold mining was encouraged by the establishment of a royal mint at Santiago in 1749, and it peaked at more than 3 metric tonnes around 1810. A decline in mining came as a result of the war for independence (1819-1823) from Spain and it was in this period that Chile was producing as much gold as Peru and Mexico combined. The nineteenth century was a time of political turmoil, and as a result miners left Chile to explore in more politically stable countries. In the 1930’s, when the political climate stabilized, considerable gold was once again being mined as a by-product of copper and silver. This third cycle of production was accelerated with the rise in gold prices.