The Southern Ocean Salmon project under study by ICLARM and under consideration by Chile has a major element a solmon hatchery tentatively located on the Salto Chico in southern Chile. This discussion, in the form of a progress paper, describe the physical concept on which this hatchery is based and develops a preliminary economic analysis for its operation. This analysis is , of course, very preliminary in nature although much of the cost information is taken frmo recent detailed studies of salmon enhancement in Washington State and Alaska.