As the world’s largest copper producer and one of the largest lithium suppliers, Chile is central to the global energy transition and the geopolitical race to critical‑mineral security. The incumbent Boric administration has strengthened the state's role in mining through initiatives like the Chilean National Lithium Strategy and the Mining Royalty Law. A transition is approaching after the election of José Antonio Kast.
José Antonio Kast recently announced his cabinet. One notable decision was to merge the ministry of Mining with the ministry of Economy, Development and Tourism. The combined portfolio will be headed by Daniel Mas, the current vice president of the Confederation of Production and Commerce (CPC), following a business career in the private sector.
Market participants will next look for further indications of what policies from the Boric government are likely to remain and who Kast selects for the chairmanship of Codelco's board. Codelco’s current Chairman is Maximo Pacheco, whose term ends in May 2026.
CRU's global team of analysts have examined the potential impacts of this new political landscape on the copper and lithium industries.
Implications for Codelco: Immediate levers and likely reforms
Codelco, the state-owned mining company, is facing a challenging moment. It remains the world's top producer of copper and recently signed a long-term partnership with SQM for joint control of lithium production in Chile’s Salar de Atacama. The company is grappling with a debt of $23.8 billion and has seen its copper production stagnate at around 1.3 million tonnes annually, a significant drop from its peak of 1.7 million tonnes reached in the past decade.
Kast’s administration may give a new Chairman the task to impose more rigorous fiscal discipline on Codelco to secure its long-term economic viability. Tomas Bunster, a key advisor to Kast, stated, "Our main concern on Codelco is to make it a sustainable company."
CRU’s copper analyst Nicolas Muñoz stresses that financial oversight is only part of the solution: "Leadership and governance changes alone will not raise tonnage if the sector’s technical bottlenecks at major sites remain unresolved; the government must pair oversight with capital and technical solutions to fix onsite operational constraints such as water, tailings, underground access and plant reliability. These are the issues that are currently limiting Chile’s output."
Investment, permitting and project development
A central promise of Kast's platform is to accelerate the permitting process for mining projects. In practice, for copper, this should favour brownfield work and joint venture structures that can be financed and executed rapidly, delivering capacity upgrades and processing improvements on relatively short timelines.
Greenfield projects on the other hand, which require secure institutional frameworks to lower perceived risk, will benefit from the regulatory clarity but face harder constraints. “Chile has relatively few very large greenfield copper prospects and meaningful new developments will still depend on parallel commitments to desalination, power and port infrastructure development, robust community engagement and credible social license strategies”, explained Muñoz.
On lithium, Kast argues that the current structure concentrates reserves among too few operators and does not incentivize new entrants. His program proposes creating an investment‑friendly framework by reducing regulatory and tax burdens, ensuring legal and security certainty, and enabling a more transparent and competitive market to attract fresh capital and developers while maintaining state interests where appropriate.
President Boric’s National Lithium Strategy effectively directed state miner Codelco to negotiate a public‑private partnership with SQM, creating the joint‑venture company NovaAndino Litio, and assigning Codelco majority control of lithium production from 2030. Indications are that Kast will not revisit this deal.
Chilean legislation on lithium dates back to the 1970s, in which lithium was classified as material of nuclear interest, making it an exceptional mineral under Chilean law. Excluded from the normal mining concession regime in place, lithium is managed under a special, state‑led regime – primarily overseen by the Chilean Commission of Nuclear Energy (CCHEN) and implemented through instruments such as Special Operating Agreements – with CORFO, SERNAGEOMIN and the DGA also involved in brine oversight.
“Regulatory clarity on royalties, export rules and state participation are a decisive factor for investment timing and project design”, said Cameron Hughes, Lithium Market Analyst at CRU.
“Community engagement and environmental permitting complexities can also extend the lead time on projects. With significant price volatility and shifting global inventories already creating investment uncertainty, stable domestic policy and project economics are essential for developing the Chilean lithium industry”, highlighted Hughes.
A new era of Argentina-Chile collaboration?
The political affinity between Kast and Argentina's President Javier Milei could herald a new era of cross-border mining cooperation. Argentina possesses a significant pipeline of undeveloped copper projects, which CRU estimates could exceed 1,000 kt over the next decade. Closer collaboration could expedite the development of key Argentinian projects like Josemaria, Filo del Sol, and Los Azules, which would greatly benefit from access to Chilean ports and infrastructure.
Milei's administration has already pushed pro-investment reforms, such as the Incentive Regime for Large Investments (RIGI) and Decree 449, which are designed to attract capital by offering fiscal stability and reducing bureaucracy. While President Kast may look to mirror these reforms, he "may be stymied by a lack of congressional support", warns Cameron Hughes.
Implications for global markets
Under Jose Antonio Kast, the market will be hoping for faster regulatory reforms, a pro-investment stance, and a disciplined approach to Codelco's operation. For copper, these moves should stimulate brownfield upgrades and attract foreign capital for priority projects.
However, Muñoz reinforces that the most significant risks to Chilean production are operational: “The key threats are water and desalination delays, most notably at Collahuasi, tailings and geotechnical constraints like at Quebrada Blanca, seismic and other operational disruptions at major assets such as El Teniente, and an ageing project pipeline with new mines underperforming."
For lithium, Cameron Hughes points out that foreign investors will be closely watching for "regulatory updates affecting the Atacama, any settlement or court outcomes related to the National Lithium Strategy and announcements on expansions or FDIs for major Chilean projects. To succeed, Chile must provide a clear policy framework and resolve environmental constraints while managing its exposure to a global supply surge led by China and growing African output."
To understand the true impacts of this political shift, join our market analysts and other industry leaders at CRU’s World Copper Conference and the World Lithium Conference, co-hosted by CRU and the International Lithium Association in Santiago this April.
