The city authorities have declared the highest, "red" alert.
Fires have destroyed 60 homes, and about 500 families were evacuated. The flames spread quickly inside the city limits due to strong winds.
The military, firefighters, two planes and a helicopter are involved in the fire-fighting effort. Chilean television shows footage of billowing smoke over the city.
Dozens of people have sought medical help after inhaling toxic fumes. There have been cases of looting.
Voice of Russia, TASS