South America: Resources
South America: Resources
Encyclopedic entry. South America's economy is centered on the export of is rich diversity of natural resources.
6 - 12+
Earth Science, Geology, Geography, Human Geography, Physical Geography, Social Studies, Economics
South America, the fourth-largest continent, extends from the Gulf of Darién in the northwest to the Tierra del Fuego archipelago in the south.
South America’s physical geography, environment and resources, and human geography can be considered separately.
South America has diverse agricultural products, vast mineral wealth, and plentiful freshwater. It also has rich fisheries and ports on three bodies of water: the Caribbean Sea, Atlantic Ocean, and Pacific Ocean. The continent’s economy is centered on the export of natural resources.
Climate and Agriculture
South America extends from a broad equatorial zone in the north to a narrow sub-Arctic zone in the south. It can be divided into four climatic regions: tropical, temperate, arid, and cold.
Tropical climates—which include both tropical rainy and tropical wet and dry climates—cover more than half of the continent. Tropical rainy conditions occur in the Amazon River basin, the northeastern coast, and the Pacific coast of Colombia. The regions’ average daily temperature is 30 degrees Celsius (86 degrees Fahrenheit) with very little temperature variation throughout the year. While average annual rainfall is 262 centimeters (103 inches), some areas receive an extreme amount of precipitation; the Chocó region of Colombia, for example, receives more than 800 centimeters (315 inches) of rain every year.
Tropical wet and dry conditions occur in the Orinoco River basin, the Brazilian Highlands, and in a western section of Ecuador. Temperatures are similar to tropical rainy, but have a greater daily range. There is also less precipitation and a prolonged dry season.
Many crops thrive in the tropical climates of South America. Cashews and Brazil nuts are cultivated. Fruits such as avocado, pineapple, papaya, and guava are also native to tropical South America.
Two very important cash crops are coffee and cacao, which is the source of cocoa, the base ingredient in chocolate. Brazil is the world’s largest exporter of coffee, and it used to be one of the largest exporters of cacao. In 2000, a fungus spread throughout many of South America’s cacao plantations, devastating the economies of the region and driving up the price of chocolate. The chocolate industries of Brazil, Venezuela, and Ecuador are slowly recovering, but most of the world’s cacao now comes from countries in tropical Africa.
The continent’s temperate climates are located south of the Tropic of Capricorn and in the mid-level elevations of the Andes mountains. Temperate climates have a greater temperature range and lower winter temperatures than tropical climates.
South America’s temperate climates are home to a number of industrial crops and livestock. Corn is produced throughout the temperate climates, and soybeans have become an increasingly lucrative crop in the Pampas.
The Pampas’ vast, high-quality pastures are also the center of South America’s huge ranching industry. Brazil is the world’s third-largest beef exporter (behind only Australia and the United States). Argentina is also an important beef exporter.
Arid climates are found in deserts, coastal areas, and interior regions throughout South America. Some of these climates are extremely cold, while others are extremely hot—but they all receive very little precipitation. This makes agricultural production difficult. However, heavily irrigated crops, such as rice and cotton, are grown in desert oases.
Cold climates occur in the southern ends of Argentina and Chile and the highest elevations of the Andes. Cold climates have an average annual temperature of below 10 degrees Celsius (50 degrees Fahrenheit). These climates are characterized by long dry seasons and high winds.
While these cold climates limit crop production, they are also home to thousands of native potato species and the native quinoa plant—a grain-like crop grown for its edible seeds. Potatoes and quinoa are starchy food staples of the Andean diet. Potatoes are now one of the biggest crops in the world. Ninety-nine percent of the potatoes grown throughout the world can be traced to a single species that was originally cultivated in the Chiloé Archipelago more than 10,000 years ago.
In addition to potatoes and quinoa, grazing animals such as sheep, llamas, alpacas, and vicuñas also thrive in cold climates. These animals are bred for their meat and wool, which is used in high-quality textiles exported throughout the world.
Forestry and Fishing
Forestry is the management of trees and other vegetation in forests. It is a major economic activity for tropical South America, especially the Amazon River basin. Many high-value tree species, such as mahogany and rosewood, are native to the rain forest. Lumber from these trees is exported to foreign markets for use in cabinets and floors. Some countries have tree plantations. Chile, for example, is an important exporter of wood chips, plywood, and paper pulp.
Lower-grade woods are important to the construction market in South America. The most familiar of these less-expensive woods is eucalyptus. Eucalyptus is not native to South America, but it grows at an incredibly quick rate. Eucalyptus is used as both a building material and as fuel in low-income communities throughout South America.
Marine fisheries are the most important economic activity along South America’s Pacific coast, although overfishing has depleted many fish populations. The cold Peru Current brings nutrient-rich waters to the coast, creating a fishery with everything from whales to shrimp. Peru and Chile’s abundant anchovy catches are processed into fishmeal, an ingredient used in animal feed and fertilizer. Chile is a global leader in farm-raised salmon and trout, while Ecuador is an important shrimp exporter.
Mining and Drilling
The mining industry is one of South America’s most important economic engines. The continent contains about one-fifth of the world’s iron ore reserves. Iron and steel (an iron product) are used in construction and machinery throughout the world.
More than one-quarter of the world’s known copper reserves are in South America, mostly in Peru and Chile. Valued at $26.9 billion in 2009, copper accounts for nearly one-third of the exports of Chile, the world’s largest copper exporter. Copper is used in electrical wiring and equipment because it is a good conductor of heat and is resistant to corrosion.
Other important metal deposits include tin, used to solder metallic surfaces; lead, used in construction, batteries, and bullets; and zinc, used as an anti-corrosion agent. Brazil, Peru, and Bolivia are major producers of tin. Lead and zinc deposits are found primarily in higher elevations of Peru, Bolivia, southern Brazil, and northern Argentina.
South America is home to some deposits of oil and natural gas, which are drilled for energy and fuel. Oil and gas extraction is the dominant industry of Venezuela, with major deposits found around Lake Maracaibo and the El Tigre region. The oil sector accounts for about one-third of Venezuela’s total gross domestic product (GDP).
The Built Environment
South America’s economic growth over the last half-century has prompted its cities to expand rapidly. These cities, however, often suffer from inefficient transportation and utility systems, pollution, and unregulated residential growth.
São Paulo, Brazil, is an industrial powerhouse and the largest city in the Southern Hemisphere, with a population of more than 11 million. The city lies at the center of the São Paulo metropolitan area (SPMA), which has an estimated 19,889,559 residents and covers more than 7,743 square kilometers (3,067 square miles). The SPMA is defined as a “megalopolis” because it covers a vast area and incorporates several distinct cities.
São Paulo’s growth mostly comes from the coffee boom that hit the city in the 1880s. Immigrants from Europe and Japan came to the city to work in the coffee trade. Today, São Paulo produces about half of Brazil’s industrial goods and is the center of South American manufacturing.
São Paulo’s economic opportunities have attracted many poor migrants. This flood of immigration has spurred the creation of massive shantytowns, called favelas. In São Paulo, there are more than 600 favelas. Favelas are often removed from the city center and disconnected from basic city services, such as water, sewage, and electricity.
The drug trade, mostly cocaine, is also centered in favelas. Drug trafficking has become a major economic industry in South America, providing hundreds of millions of dollars to drug organizations, known as cartels. The farmers who produce raw materials for the drug trade rarely benefit as much as the cartels that deliver the drugs to an international market. Drug cartels have become a serious security threat to South American governments, especially in Colombia and Brazil.
Lima, Peru, is the second largest desert city in the world, after Cairo, Egypt. The Lima metropolitan area has a population of almost 9 million people and accounts for about one-fourth of Peru’s total population. Lima is known as the Gastronomical Capital of the Americas for the number and diversity of local dishes. These dishes bring together the city’s roots as a Spanish colonial center and the influences of both international immigrants (African, Chinese, Japanese) and local migrants (Andean, Amazonian).
Lima has the largest export industry in South America. Lima and the nearby port city of Callao are also among the most important fish trade centers in South America. Lima and Callao have regular, efficient maritime routes to coastal Asia.
Much like São Paulo, Lima’s large size causes certain infrastructure problems. Heavy traffic congestion is an effect of Lima’s indirect street and highway network, and unreliable public buses. These older buses are often much smaller and more polluting than new buses. In order to reduce traffic and pollution, Lima is in the process of constructing an above-ground subway-type system.
South America is home to a number of engineering marvels, most of which are connected to managing the continent’s natural resources. The Itaipu Dam, completed in 1984, spans the Paraná River at the Brazil-Paraguay border. The dam generates more hydroelectric power than any other dam in the world. (China's Three Gorges Dam is capable of producing more, however.) In 2008, the dam generated 94.68 billion kilowatt-hours, which supplied 90 percent of Paraguay’s energy and 19 percent of Brazil’s. In 1994, the American Society of Civil Engineers elected the Itaipu Dam as one of the Seven Wonders of the Modern World.
South America has some of the largest mining operations in the world. The Chuquicamata mine in northern Chile is considered the world’s largest open-pit copper mine. It is 4.3 kilometers (2.7 miles) long, 3 kilometers (1.8 miles) wide and more than 847 meters (2,780 feet) deep. The mine produces more than one-fourth of Chile’s copper. Its smelter (which extracts the copper from rock ore) and refinery (which purifies the extracted copper) are also among the largest in the world.
57 people per square kilometer
Aconcagua, Argentina (6,901 meters/22,641 feet)
Most Renewable Electricity ProducedParaguay (99.9%, hydropower)
Largest Urban Area
Sao Paulo, Brazil (20.4 million people)
Amazon River (7 million square kilometers/2.72 million square miles)
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May 20, 2022
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