Return to El Teniente?

U.S.-based multinational companies have long since written off as dead losses the Chilean operations that were expropriated by the late Marxist President Salvador Allende. But last week the new Chilean Foreign Minister, Ismael Huerta, announced at the U.N. that the military junta that overthrew Allende in a bloody coup last month has reopened negotiations with Anaconda and Kennecott with a view toward paying them something for those giant copper mines --Anaconda's Chuquicamata and Kennecott's El Teniente--that Allende expropriated. Some other members of the Chilean U.N. mission even dropped hints that Anaconda and Kennecott might actually be invited back to operate the mines for the new government.

Both sides were quick to emphasize that the talks are in the most informal, preliminary stage (though one copper-company executive added that a supposedly casual meeting with Huerta was attended by "70 to 90" U.S. executives).

The Chileans further stressed that they have no thought of returning ownership of the mines to the American companies. Indeed, they said, the matter of compensation itself must eventually be decided by the Chilean courts. But they asserted that the new government believes that Allende made an improper calculation of the compensation due. When their properties were taken over, Anaconda estimated its losses at $462 million; Kennecott calculated $365 million. But Allende figured that "excess profits" earned in the past left the companies owing money to Chile.

Chile's new government desperately needs foreign loans and credits; by talking about compensation for the copper companies, the country's diplomats appeared to be trying to demonstrate a reasonable spirit that they hoped would impress foreign lenders.

Behind the diplomatic negotiations, the outlines of a hard, realistic deal emerged. Chile has only one potential source for paying Anaconda and Kennecott anything: profits from the mines. But Chilean members of the U.N. mission admitted that in order to get the bogged-down mines running well again, the nation desperately needs foreign technology and expertise, and is willing to get it from the U.S. The clear implication: Anaconda and Kennecott might come back and run the mines on behalf of the Chilean government and be paid for their former ownership out of the profits that they make for Chile. Ironically, if the companies do collect compensation, they may have to hand over some of the cash to the U.S. Government, to repay money that they have received from the federal Overseas Private Investment Corp., which insures investments abroad. Anaconda has received $12 million from O.P.I.C., and Kennecott more than $60 million.

None of this means that ITT, the most celebrated American company in Chile, will get a cent for its expropriated properties. Chileans who took a conciliatory line toward Anaconda and Kennecott pointedly said nothing at all about ITT. After the scandal about ITT's alleged interference in internal Chilean politics, it would be difficult for any Chilean government of whatever ideological complexion to befriend the giant conglomerate.

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