Where your $4 a pound goes

U.S. Navy photo of HSV-2 by Paul Farley, 2006.

I’ve been kvetching a lot about the source of gold and oil. But what about the upside? Once metals are out of the ground and in use, what gets left behind isn’t just a hole in the ground and a bunch of sulfuric acid seeps — there is also munnie! These days, for example, copper is bringing $4 a pound into Chile. (Well not really — sadly if you’re Codelco it’s bringing in $4 billion less than spot prices would indicate, because of futures contracts that locked in low prices for some lucky trader. But still, there’s money coming in.) So where does it go?

Thanks to a law passed under Pres. Augusto Pinochet and left unchanged for decades, 10% of the profits from Codelco, the world’s biggest copper producer, are reserved for the Armed Forces of Chile (known as the FACh, for its soon-to-be-outdated Spanish initials). While both left and right have talked about changing the law, nobody ever gets around to it. (Sorry Mom, I was just about to cut the defense department’s guaranteed appropriations but I got distracted.)

With copper prices at a record, you can just see the foam dripping from the jowls of 150 arms dealers and other exhibitors as they make their way to Exponaval 2010, a show of naval technology in Valparaiso, Chile Nov. 30 to Dec. 3. Organizers say the show has more than doubled in size from two years ago to 8,500 square meters (about 85,000 square feet) and will host 20,000 visitors, up from 8,000.

Assuming that the show succeeds in its goals of facilitating $600 million in arms deals, we can all rest easier knowing that the coasts of South America will be safer from


well, you know. Safer.


One thought on “Where your $4 a pound goes

  1. Kepler

    Thanks, Setty, for writing about this. It is a pity no big name in Latin American society seems to be paying too much attention to how the dogs of war are scavanging in Latin America. Perhaps this is too much for any public figure? I mean: one thing is the isolated statement, but quite another one where someone big would be mentioning the issue time after time in interviews, articles, etc.

    I just saw two articles: one about Viktor Boutt being sent to the US and another about the big expectations from both the US and Russia for weapons exports next year.

    Los militares son la mayor lacra de Hispanoamérica y hay un montón de fuerzas extranjeras que invierten un montón en c ultivarlos.

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