Chile Thirsts for Rain as Goats Drop, Mines Face Power Cuts
By Sebastian Boyd
April 11 (Bloomberg) -- The reservoir at the Laja dam south of Santiago gauges Chile's predicament: It has been less than half full since August.
Chile is in the grip of the most damaging drought in a century. The water shortage is reducing output at hydroelectric dams, pushing up energy prices and forcing the government to consider restricting power supplies to mines and factories. Subsistence farmers' crops and livestock are dying.
``This year we've had very, very poor rains,'' said Julia Toro, 71, who has 130 goats, horses and sheep on her mountainside farm in central Chile. More than 50 of her animals died in the past six months.
The weather phenomenon known as La Nina exacerbated dry conditions, fueling the drought. Last year's rainfall was already below normal when La Nina, a drop in Pacific Ocean water temperatures that reduces precipitation, was detected in September, according to the Chilean Meteorological Service.
``It's like an earthquake in disguise,'' Alfredo Ovalle, head of Chile's Chamber of Production and Commerce, said to reporters after meeting with Agriculture Minister Marigen Horkohl in February. ``It affects the whole economy.''
This La Nina is the most intense in more than half a century, according to meteorologists at the University of Chile in Santiago. Since August, northern Chile has received no measurable rain. Just 14 millimeters (0.55 inch) has fallen in Santiago, far below the average of 53 millimeters, according to the meteorological service.
`Worst Situation'
``There's more industrial activity, there's more agriculture, the population has grown and the temperatures are very high,'' said Rodrigo Weisner, the administrator for water at the Ministry of Public Works, in the rural town of San Pedro. ``We've got the worst situation in 100 years.''
Much of the mining industry in Chile, the world's biggest copper exporter, depends on hydroelectric power. In central and southern Chile, where Codelco, Antofagasta Plc, Anglo American Plc and Freeport-McMoRan Copper & Gold Inc. all have mines, 45 to 70 percent of the electricity comes from water turbines.
The Laja reservoir, 460 kilometers (290 miles) south of Santiago, held 1.9 billion cubic meters (67 billion cubic feet) of water last month, down from 3.1 billion a year earlier, according to the water management agency. The dam supplies three generators.
The Colbun dam power station, run by Colbun SA, the country's third-biggest power generator, produced 99,000 megawatt hours of electricity in January, down from 295,000 a year earlier, according to Energy Commission data. Reduced output from hydro plants helped push up electricity prices 20 percent in February, Central Bank President Jose de Gregorio said at a conference in Buenos Aires last month.
Rationing Risk
Power rationing may be unavoidable if rains don't resume soon, officials say. Energy Minister Marcelo Tokman warned of the likelihood at a seminar last month, said Karin Niklander, a ministry spokeswoman. Rationing was imposed during the La Nina of 1998 and 1999.
To encourage conservation, the government is allowing generating companies to temporarily lower the electric voltage provided to cities. It's urging consumers to buy energy-saving light bulbs, unplug appliances when not in use and do their ironing during off-peak morning hours.
The drought could trim as much as 1 percentage point from Chile's growth, said Cristian Gardeweg, an economist at Celfin Capital SA in Santiago. The median estimate of 32 economists surveyed by the Central Bank last month is for 4.2 percent expansion this year, compared with 5.1 percent in 2007. Mining generated 23 percent of gross domestic product in 2006, the latest figure available.
Rural Pain
In some rural areas, it's a fight for survival. The La Nina is reducing rainfall in agricultural regions by 40 to 60 percent, University of Chile meteorologists say. President Michelle Bachelet's government declared a state of emergency for 209 of Chile's 345 municipalities.
``Small farmers are the worst affected because they're the least prepared and have the least equipment,'' said Rudy Little, who oversees three counties for the Agriculture Ministry.
The Agriculture Ministry promised 22 billion pesos ($49 million) to help drought-affected areas and a 16 billion-peso investment in irrigation systems.
Indap, a government agency that assists farms of less than 40 acres (16 hectares), has provided drought aid to 80,000 of them, said Rodrigo Calderon, spokesman. Some livestock deaths result from farmers putting too many animals on their land, he said.
Water Deliveries
The government is trucking drinking water to rural residents, handing out groceries and fodder, and providing subsidies to deepen wells, Bachelet said. Some towns are having trouble keeping up as more families ask for water.
``We try to do it twice a week, but it's impossible because every day we have more people'' in need, said Avelino Farias, mayor of San Pedro, southwest of Santiago.
San Pedro, a town of 7,600, is dotted with abandoned strawberry fields and dried-out asparagus beds. Luis Navarro, 49, farms strawberries on rented fields and said he has never seen a worse drought there.
He planted only a quarter as many berry plants as usual this year, and expects only half to survive until harvest.
To contact the reporter on this story: Sebastian Boyd in Santiago on sboyd9@bloomberg.net
Last Updated: April 11, 2008 00:05 EDT |
