1 THE I MPACT OF MI NI NG PRI CES I N THE LOCALI ZATI ON OF I NDUSTRY I N CHI LE, 1895 – 1967 ∗ Marc Badia-Miró Universitat Oberta de Catalunya, Spain mbmiro@uoc.edu César Yáñez Universitat de Barcelona, Spain cesar.yanez@ub.edu Abstract The different mining cycles have had an enormous impact in the evolution of the localization of economic activity, and in particular, of industry in Chile. In the first place, the nitrate cycle was characterized by a labour-intensive extraction process and activity which was geographically very concentrated (Tarapacá and then in Antofagasta). Both initially, when it existed alongside nitrate mining and later alone, the copper cycle is geographically much more disperse and its activity, very capital intensive. Nitrate and copper mining also had a very unequal impact on industry. During the nitrate cycle as a result of growing demand, there is significant industrial development in these provinces led by the industrial sectors that produced non-durable consumer goods. As a result of this growth in industrial employment in these mining provinces, the highest levels of industrial dispersion in the country are registered. This expansion impacted in the industrial thrust of the province itself, within the domestic market, in those provinces with sufficient response capacity. During the copper cycle the result is not as clear. The impact in industry is much more limited to those sectors most closely linked to mining production, more capital-intensive (equipment goods). This means that the greater dispersion of mining during the copper cycle does not have the same backward link, and growth in industrial employment is far more limited. In this context, there are other factors which boost growth in industrial employment (agglomeration economies). These factors bring about a period of maximum concentration of industry due to the expansion of Santiago. ∗ A first version of this paper was presented in the 15 th International Economic History Congress, in the session Commodity Prices over Two Centuries: Recourse Curse, De-Industrialization, Volatility and Development, Utrecht 2009 and in the Seminario de Historia Económica in the Aplied Economics Department of the University of Zaragoza.