Opinion: Another US incursion in Latin America 

The United States has danced this tune many times in the past, and each time it led to misery, bloodshed or civil war for its southern neighbours.  

The track record of U.S. intervention isn’t good, and that’s perhaps sobering news for the Venezuelans. Take the period throughout the 1970s.  

This was a dark period in U.S. geopolitical history; the Vietnam War was the key event. But it was also a prolific era of military interventions across South and Central America. And, like today, much of the geopolitical chest-beating was based on securing America’s supply of critical commodities. 

‘Chilenization of copper’ 

If you’re not familiar, Chile is the world’s largest producer of copper, accounting for around 30%of total global supplies. It’s what makes copper a serious business in this South American nation, and it’s been that way for over 60 years. 

In fact, half of the country’s total exports come from just this commodity. In a way, copper to Chile is similar to what iron ore or coal is to Australia, in terms of its essential role in the economy. 

However, copper has also played a leading role in staging a dark and brutal chapter in Chile’s not-so-distant past.  

It all started back in the early 1970s, when the left-wing Chilean government, led by Salvador Allende, set about the outright nationalization of the country’s copper mines. It was a period known as the ‘Chilenization of copper.’ 

Frustrated by multinationals siphoning the country’s mineral wealth mostly to the U.S., Allende gained widespread public appeal by bringing the country’s copper assets under state control. In 1971, Allende’s government amended the country’s constitution, which gave the nation full ownership of all major copper mines.  

With tails between their legs, the multinational mining companies were swiftly extradited from the country. 

No compensation  

Multi-million-dollar assets were wiped from the companies’ balance sheets, effectively overnight.  

In the early 1970s, copper accounted for 80%of Chile’s total exports. It’s why the commodity was popularized as “Chile’s salary!” 

Unsurprisingly, the people adored Allende and his Marxist-government. But his bold actions were creating ripples to the north.  

The U.S. government, suffering from years of chronic communist paranoia, was determined to undermine Allende and eradicate the idea of nationalism for other would-be South and Central American nations looking to repeat Chile’s playbook. Which is precisely what the U.S. government did. 

Chile was condemned by the West and given a strong dose of international sanctions. However, for then-U.S. President Richard Nixon, he wasn’t satisfied with these soft tactics.  

Despite the Chilean public’s overwhelming support for the democratically elected Allende government, U.S. officials systematically dismantled his control. 

US-backing 

On Sept. 11, 1973, a group of military officers led by General Augusto Pinochet seized power in a coup, ending civilian rule. Chile called the event its very own ‘September 11.’  

The military established a junta (dictatorship) that suspended all political activity in Chile and repressed left-wing movements, especially communist and socialist parties. Allende was killed, most likely executed by the military, while his presidential palace was attacked.     

The Nixon administration, which had worked to create the conditions for the coup, promptly recognized the junta government and supported it in consolidating power. It marked the end of Chilean democracy, which had been in place since 1932. 

It also initiated one of the most violent periods in Chile’s history. The U.S.-supported government used political suppression, torture and murder to destroy all remnants of the left ideology. This persisted for years. 

As the country’s most important export, copper played a critical role in sparking the darkest chapter in Chile’s history. 

Dictatorship encore? 

Is history repeating itself 53 years later in Venezuela? 

The U.S. has a poor history of military interventions in South America, sowing the seeds of chaos and often fanning civil war. There is no doubt that the U.S. is playing a dangerous game,  and in some of the most important regions for future oil supply. The stakes are enormous, after all, oil is the global economy’s most critical resource. 

So, what could possibly go wrong? It all boils down to this: Keep commodities at the forefront of your portfolio right now; we could be embarking on a major new chapter in this market.  

James Cooper is a geologist based in Australia who runs the commodities investment service Diggers and Drillers. You can also follow him on X @JCooperGeo.