Chile volcano eruption costs region $600m

Last week's spectacular twin eruptions of the Calbuco volcano will cost southern Chile's Los Lagos region, a tourism and agriculture hub, up to $600 million, a local business leader said Monday.

The region is struggling to clean up some 210 million cubic meters (7.4 billion cubic feet) of ash spewed by the volcano, which contaminated rivers, lakes and vast stretches of prairie.

With large swathes of farmland blanketed in the thick gray ash and debris, "the agriculture and livestock industry will probably be the hardest hit," said Emir Jadue, head of the Chamber of Commerce in the town of Puerto Varas, near the volcano.

"The Los Lagos regional economy had annual turnover of $2 billion. We estimate the eruption of Calbuco will cause losses of up to about 30 percent," he said.

Los Lagos has more than a million head of cattle, around 30 percent of the total in Chile, and supplies about half the South American country's milk.

Chile's salmon industry, the world's second-largest, is also facing losses. Los Lagos has the largest concentration of salmon farms in the country, but many had their water supplies contaminated by ash.

The effect on the region's key tourism industry, which draws about 200,000 visitors a year, is less clear.

"The volcano could decrease the number of tourists coming for outdoors activities... but it could also increase the number of tourists who want to see an active volcano," said Jadue.

Hotels in the affected area have reported 10 percent cancellations for the upcoming long weekend.

Calbuco roared to life Wednesday and Thursday after five decades of inactivity, belching a 15-kilometer (nine-mile) column of ash into the air before spewing bright orange and red lava, forcing some 5,000 people to evacuate.

The volcano has continued emitting ash and the occasional burst of fire, but the National Geology and Mining Service said its seismic activity was now lower.

"Now it's a matter of waiting to see if it's a trend," it said on Twitter.

The area remains under red alert, with a 20-kilometer evacuation zone around the crater.