The mining drama of 1980

The “drama” that unfolded around mining provisions during the drafting and approval of the 1980 Constitution can be told in three acts.

ACT ONE. The draft Constitution produced by the so-called Ortúzar Commission originally enshrined, in plain terms, the doctrine of the state’s “eminent domain” over mineral resources—a formulation widely seen as consistent with a free-market system. This version was approved by the Council of State and remained in the text until just days before the September 11, 1980 plebiscite. The economic team of the day strongly supported it, believing it would finally unlock private investment in Chile’s crucial mining sector.

ACT TWO. At the eleventh hour—literally days, even hours, before the text was put to the public—a radically different mining clause was slipped in. A separate group, dominated by military officers, managed to insert language that, in the eyes of its authors, revived the opposing doctrine of the state’s full “patrimonial ownership” of all mines. In its blunt wording, the new text closely echoed the 1971 constitutional reform that had paved the way for Salvador Allende’s nationalization of copper and was regarded as irredeemably statist and hostile to private investment in a market economy. Through what contemporaries described as a “fierce battle,” the original pages were replaced and new ones inserted, declaring the state to be the “absolute, exclusive, inalienable, and imprescriptible owner of all mines.” The language bore a striking resemblance to the 1971 Allende-era provisions—though, crucially, it now sat in an entirely different constitutional context. Act Two ends with the publication of the revised text and the call for the plebiscite.

ACT THREE. A flurry of last-ditch, ultimately unsuccessful efforts to reverse the change and restore the Council of State’s original “eminent domain” language. The same cast of characters battled on between August 11 (the date the final text was published in the Diario Oficial and the plebiscite announced) and September 11, 1980. To undo the “statist” turn, government lawyers devised an ingenious but doomed expedient: publish an amending decree in the Diario Oficial that would modify the very text the public already knew and was about to vote on, so that voters would understand they were approving the original draft plus the amendment—effectively resurrecting the “eminent domain” approach. In the end the gambit failed, and the mining clause remained exactly as it had been published and as it still stands today.

That was the drama—the backdrop against which José Piñera, fresh from his landmark labor and pension reforms, was called to act. His task was to reconcile an apparently statist mining clause with an otherwise liberal Constitution and development strategy, and to find the solution that would serve Chile best. As Andrés Cavallo, Manuel Salazar, and Óscar Sepúlveda put it in their book “La Historia Oculta del Régimen Militar”, Piñera’s mission amounted to nothing less than “squaring the circle”.