Chile Kast: Mining Reversal Unlocks $105B in Projects

Overview

Chile produces roughly a quarter of the world's copper and holds the largest lithium reserves on Earth. On March 11, 2026, José Antonio Kast was sworn in as president with a mandate to reverse his predecessor's state-led approach to these resources—scrapping plans for a national lithium company and opening the sector to broader private investment. The shift puts an estimated $105 billion in stalled mining projects back in play.

The stakes extend well beyond Chile's borders. The country's mining policy directly shapes the global supply of two metals essential to the energy transition and electronics manufacturing. Kast's government plans to sign a critical minerals agreement with the Trump administration within days of taking office, positioning Chile as a key partner in Washington's effort to reduce dependence on Chinese-controlled mineral supply chains. Whether the new approach accelerates production or destabilizes existing public-private partnerships—including the Codelco-SQM lithium joint venture signed under former President Gabriel Boric—will test the durability of Chile's resource governance for years to come.

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Key Indicators

24%

Share of global copper production

Chile has been the world's largest copper producer continuously since 1983.

9.3M tonnes

Lithium reserves (world's largest)

Chile holds 36% of the world's identified lithium reserves, concentrated in the Salar de Atacama.

$105B

Mining investment pipeline through 2034

Estimated value of mining projects awaiting regulatory approval or construction permits.

500+

Permits per mining project

Number of separate permits currently required before a single mining project can begin construction.

58.2%

Kast's runoff vote share

The second-highest vote percentage in a Chilean presidential runoff since the return of democracy in 1990.

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People Involved

José Antonio Kast

In office

Gabriel Boric

Left office March 11, 2026

Daniel Mas Valdés

Took office March 11, 2026

Organizations Involved

Codelco (Corporación Nacional del Cobre)

State-owned mining company

Facing governance review under new administration

Chile's state-owned copper mining company, the world's largest copper producer, now facing a comprehensive audit and possible expansion of private joint ventures under the Kast government.

SQM (Sociedad Química y Minera de Chile)

Private mining and chemical company

Partner in Codelco lithium joint venture; future uncertain under new policy

One of the world's largest lithium producers, privatized under Pinochet in the 1980s and now in a joint venture with Codelco that may be restructured under the Kast government.

Chilean Mining Chamber (Consejo Minero)

Industry association

Pushing for permitting reform and dedicated mining leadership

Chile's primary mining industry group, which publicly criticized the ministry merger and the appointment of a minister without mining experience.

Timeline

Kast inaugurated as Chile's 38th president
Government

Kast took the oath of office at the National Congress in Valparaíso before roughly 1,100 guests including Argentina's Javier Milei, Ecuador's Daniel Noboa, Panama's José Raúl Mulino, and Spain's King Felipe VI. A critical minerals agreement with the Trump administration was expected within days.
March 11th, 2026
Kast announces cabinet with merged Mining-Economy ministry
Government

President-elect Kast named Daniel Mas, an agribusiness engineer, as dual Minister of Economy and Mining—abandoning a plan to appoint former BHP executive Santiago Montt to a standalone mining post.
January 20th, 2026
Kast wins presidential runoff in landslide
Election

Kast defeated Jara with 58.2% of the vote—7.2 million ballots, the highest total in Chilean history—winning every region of the country.
December 14th, 2025
Kast and Jara advance to presidential runoff
Election

In the first-round vote, Jeannette Jara of the Communist Party led with 27%, followed by Kast with 24%. No candidate reached a majority, triggering a December runoff.
November 16th, 2025
Chile passes permitting reform law
Legislation

Congress approved Law 21.770 (Ley Marco de Autorizaciones Sectoriales), aiming to cut permitting timelines by 30–70% for strategic mining and energy projects.
September 2025
Codelco-SQM joint venture finalized as Nova Andino Litio
Industry

The partnership was formalized with Codelco holding 50% plus one share. The state would receive about 70% of operating margins through 2030, rising to 85% from 2031.
May 31st, 2024
Codelco and SQM sign lithium memorandum of understanding
Industry

The state copper company and Chile's largest private lithium producer agreed to form a public-private partnership for lithium production in the Salar de Atacama.
December 28th, 2023
Boric launches National Lithium Strategy
Policy

President Gabriel Boric announced a state-led approach requiring government majority stakes in all future lithium projects, including plans for a National Lithium Company. Existing contracts with SQM and Albemarle were honored.
April 21st, 2023

Scenarios

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Predictions leaderboard

Chile fast-tracks private mining, copper output rises toward 6 million tonnes

Kast's government streamlines permitting, honors but loosens the Codelco-SQM partnership terms, and signs a critical minerals deal with Washington that channels new foreign investment into Chilean copper and lithium projects. Industry analysts at Cochilco project copper output could approach 6 million tonnes of fine copper annually within several years if the $105 billion investment pipeline is unlocked. This scenario assumes Congress cooperates on regulatory reform and that environmental review timelines shrink as intended under Law 21.770.

Discussed by: Mining.com, Streetwise Reports, Cochilco (Chilean Copper Commission)

Consensus —

Mining ministry merger stalls reform as industry lacks a dedicated advocate

The dual Economy-Mining ministry proves unwieldy, and Daniel Mas's lack of mining expertise slows decision-making on complex regulatory and technical issues. Major projects remain stuck in permitting limbo, the Codelco-SQM joint venture proceeds under its existing terms because renegotiation is legally and politically difficult, and Kast's 20% production-boost target proves unrealistic. Mining investment drifts to Peru and Argentina, which offer clearer regulatory frameworks.

Discussed by: Chilean Mining Chamber, Bloomberg, Americas Quarterly

Consensus —

Renegotiation of Codelco-SQM deal triggers investor uncertainty

Kast's government attempts to renegotiate or restructure the Nova Andino Litio partnership to reduce the state's operational role and revenue share. The effort faces legal challenges from existing contract protections, resistance from Codelco's own board, and political opposition in Congress. International investors, unsure whether Chile will honor agreements across political transitions, delay capital commitments. Chile's lithium output stagnates while Australia and Argentina gain market share.

Discussed by: Oxford Analytica, Financial Times, mining industry analysts

Consensus —

Chile becomes cornerstone of U.S. critical minerals strategy

The Kast government signs a comprehensive critical minerals agreement with the Trump administration, joining 11 other countries already in the U.S.-led FORGE framework. Chile receives preferential trade terms and American investment for copper and lithium processing facilities, reducing Chinese intermediaries in the supply chain. The partnership accelerates Chile's shift from raw extraction toward domestic refining and battery component manufacturing—a goal shared by both Boric's and Kast's platforms, despite their different approaches to state involvement.

Discussed by: CSIS (Center for Strategic and International Studies), U.S. State Department, Chatham House

Consensus —

Historical Context

Bolivia's failed state-led lithium program (2008–2025)

2008–2025

What Happened

Bolivia nationalized lithium in 2008 under President Evo Morales, requiring foreign investors to partner equally with the state company YLB. After 17 years, Bolivia failed to achieve commercial-scale lithium production. A joint venture with Germany's ACI Systems collapsed in 2019 after local protests, and a state-run potassium chloride plant operated at less than 30% capacity.

Outcome

Short Term

Bolivia remained the only country in the 'Lithium Triangle' (with Chile and Argentina) that the U.S. Geological Survey did not consider commercially viable.

Long Term

Newly elected center-right President Rodrigo Paz began reversing the state monopoly approach in late 2025, opening lithium to broader private participation—a policy arc Chile's Kast government is now accelerating in the opposite direction from Boric.

Why It's Relevant Today

Bolivia's experience is the cautionary tale most cited by supporters of Kast's private-sector approach: state control of lithium without sufficient capital, technology, or operational expertise can leave vast reserves in the ground while competitors capture the market.

Chile's privatization wave under Pinochet (1973–1990)

1973–1990

What Happened

The Pinochet military government privatized hundreds of state-owned firms under the guidance of the 'Chicago Boys' economists. Copper mining through Codelco was constitutionally exempted, but new mineral deposits were opened to private investment. SQM—now one of the world's largest lithium producers—was sold to a politically connected buyer, Julio Ponce Lerou, at below-market prices.

Outcome

Short Term

Chile attracted foreign mining capital and expanded copper production, but some privatizations enriched regime insiders at public expense.

Long Term

The hybrid model—state-owned Codelco alongside private miners—persisted for 35 years across governments of every political stripe, making Boric's 2023 lithium strategy and Kast's reversal both departures from a durable equilibrium.

Why It's Relevant Today

Kast's inauguration has been framed as Chile's sharpest rightward shift since the end of the Pinochet era. His mining policy reopens a debate that Chile's post-1990 democracy had largely settled: how much of the country's mineral wealth should the state control directly versus regulate from a distance.

Mexico's lithium nationalization (2022)

April 2022

What Happened

President Andrés Manuel López Obrador pushed a bill through Mexico's Congress in a single day that classified lithium as a 'strategic mineral' reserved exclusively for the state. A new state-owned company, LitioMx, was created to manage all lithium exploration and production. Private companies were barred from obtaining new lithium concessions.

Outcome

Short Term

LitioMx began operations in February 2023 but lacked the capital, technology, and experienced personnel to develop Mexico's lithium deposits at commercial scale.

Long Term

Mexico's lithium output remained negligible. The policy became a reference point for critics of state-led mineral strategies across Latin America, including in Chilean debates over Boric's approach.

Why It's Relevant Today

Mexico's experience reinforced the argument that declaring state control over critical minerals means little without the technical and financial capacity to extract them—an argument central to Kast's case for expanding private-sector participation in Chilean lithium.