Chile has said seismic activity is dropping at a volcano on the border with Argentina but officials are maintaining a red alert as a precaution.

Chile's emergency office ONEMI issued the highest alert in the Biobio central region after it registered high seismic activity at the Copahue volcano and an ash cloud billowing "over one kilometre" high, officials said on Monday. 

The volcano began spewing ash and gas on Saturday.

People living on the slopes of the volcano have been warned they might have to evacuate their homes.

The population in the area, however, is sparse - with about 500 people living in Copahue, a tourist town famous for its spa waters, about 900 in the town of Caviahue and an estimated 800 more in local indigenous Mapuche communities.

Mining Minister Hernan de Solminihac says activity at the volcano dropped from normal to low early Monday and the ash plume has descended to about 200 metres. That's a sign internal pressure has decreased inside the volcano.

The 2,967-metre volcano erupted in 1991 and was highly active in 2001.

In June 2011 the eruption of another volcano, Puyehue, interfered with air travel in much of the southern cone of South America - and as far away as Australia.

Source: Agencies