How copper mafias operate in Chile

Chilean authorities are investigating the theft of a copper cargo valued at about US$4.4 million belonging to state-owned Codelco.

The assailants took some 13 containers last week from the port of San Antonio in the Valparaíso region, 12 of which had red metal plates that would be exported to China.

The theft of this material is a known crime in Chile. The investigative police (PDI) seized some 308,897 kilograms of copper stolen in different events between 2018 and 2021, according to an AthenaLab investigation carried out by Pilar Lizana and published in July of last year.

Bloomberg Línea asked the PDI for updated figures on the incidence of this crime, but had not received a response until the closing of this note.

Meanwhile, Lizana, who spoke with Bloomberg Línea, said that since mid-2022 an increase in the levels of violence by criminal groups has been observed.

“There has been little talk about this topic. But it was seen that these groups had more access to weapons, they were acting more violently, and that has to do with the perception they have of the State’s action,” she explained.

This would be taking place in other illegal economies. Lizana indicates that this could also be related to Chile’s current security landscape.

“Security challenges are changing. New criminal techniques have arrived in the country, which are being transferred among the same criminal groups”, she added

The researcher believes that, in addition, the rise in copper prices in the international market becomes one of the incentives for the mafias that operate with this metal.

This conversation has been edited for length and clarity.

Bloomberg Línea: Why is copper theft in Chile so attractive to criminals?

Pilar Lizana: It’s not just copper. We also have robberies by organized groups of other products such as wood and fish. In general, it can be observed as a pattern of behavior of this type of groups.

There are certain factors in the country that we evaluate regarding illegal economies, but in particular there is one that is repeated in the other stolen raw materials: institutional weakness, which involves the traceability of the products, the effective penalties for those responsible for these crimes, the presence of the State regarding inspection and territorial control.

We have seen in the case of copper that the State is not so present. Not only are copper plates stolen in the desert, but also copper cables in different parts of the country.

How do the copper mafias operate in Chile?

In general, it is an organization that has a certain structure that has been consolidated over time.

Whether it is cable or copper concentrates, the product is usually bleached.

This is how you reach intermediaries, those who try to camouflage that metal that was stolen.

Finally, they sell it to the market, whether national or international. This depends on the dimensions.

Which are the regions most affected by this crime?

Copper cathodes are more stolen in the north, especially around the train that crosses Antofagasta. Cable theft occurs throughout the country.

What is Chile doing to confront the illegal copper economy and, consequently, the theft of the red metal?

We have quite outdated legislation, because we look at it as the crime of theft.

However, we already see that there is an organization, an illicit association, and there are companies that act as intermediaries to launder that product.

There is still a need to continue modernizing the procedures and this has to do with the evolution that the State is having to face the security challenges, in general, of Chile.

The investigation indicates that, in general, the crime had been directly confronted by the companies.

Companies are assuming a lot of that. It is also seen in companies from other industries, which are threatened by illegal economies.

Yes, progress is being made in certain areas to have public-private work, specify certain measures, but there is still a long way to go.

Efforts are being made from the private sector to work with the State and streamline modernizations to legislation and procedures.

In the case of the north, where the copper theft task force was created in Calama a few years ago, there were good results. When we begin to incorporate various institutions, the results are positive.

What is the correlation between the price of copper and the increase or decrease in theft of the metal?

We hypothesize that the higher the price of copper, perhaps the greater interest in maintaining this type of criminal organizations.

If the raw material has a higher price, they will be able to make more profits and that also creates an incentive to be able to focus at that moment.

Yes, it is a factor, but it must be understood in this context of institutional stability.

The price of copper could be high, but if the penalties are effective, there is control and a high presence of the State, that higher value will no longer be so attractive because there would be many barriers to overcome.

With information from Bloomberg