Tierra del Fuego, in the extreme south, on the other hand is cold, very wet, and relatively barren, suitable only for sheep grazing. Inland, along the whole length of the country, stretch mountains. Economy Chile's economy is based largely on exploitation of substantial mineral reserves, and agriculture. Copper accounts for almost half of exports, with other minerals and fruit, fishmeal, and timber products of secondary importance. About 80 per cent of electricity is generated by hydroelectric power, and domestic oil production accounts for about half of total requirements.
Manufacturing industry includes chemicals, brewing, wood-pulping, and tyre manufacture.
The country has one of the best public education and social service systems in Latin America, although these suffered under military rule in the 1980s. At the time of the first Spanish contact in 1536 the dominant Indian group, the Araucanians, were theoretically subject to the Inca empire, but in practice they retained considerable independence within the Inca realm. Spanish colonization began with the foundation of Santiago in 1541. The colony grew moderately but did not prosper for the next two centuries as it was overshadowed by wealthier Peru. Politically Chile became part of the Spanish viceroyalty of Peru.