Chile’s new government looks to speed up copper expansion amid tight supply

Chile’s new government is looking to boost copper production faster than previously projected by speeding up permitting and making regulatory changes, the nation’s top mining official said in an interview.

President José Antonio Kast’s administration sees annual output of the metal reaching 6 million metric tons in the next four or five years, dual Economy and Mining Minister Daniel Mas said. The nation’s copper commission Cochilco had said it would take until 2033 to hit that level, from 5.6 million tons this year.

“We are trying to increase investment to assure the expansion of some mines,” Mas said from his office in downtown Santiago. He added that the government is seeking greater output from a mix of both large and medium-sized mines.

Production in Chile, which accounts for a quarter of the world’s mined copper, has stagnated in recent years as ore quality deteriorates and both mines and new projects suffer a string of setbacks. Stepping up output would be welcome news for global supply, which is expected to struggle to keep pace with demand driven by AI data centers and electrification generally. It would also bode well for Kast, who wants to accelerate economic growth from current levels of 2.5% to 4% by the end of his term in 2030.

Codelco is central to the government’s plans, after the state-owned company undertook a multi-billion-dollar investment program to overhaul aging mines. The projects have pushed Codelco’s debt to earnings before items to about 5 times, the highest among major copper producers tracked by Bloomberg, including Freeport-McMoran Inc. and BHP Group.

“We are going to push for a significant transformation in Codelco,” Mas said in his first interview with foreign media. “Prior governments haven’t been able to implement change. So, we have to face this in a stronger way.”

Mas said the administration has already chosen a successor to Máximo Pacheco as Codelco chairman, but declined to name them. The announcement will be made between the company’s April 20 shareholder meeting and the May 26 end-date of Pacheco’s term.

Exploration incentives

Government officials are working on a broad overhaul of permitting that could replace dozens of approvals with simplified declarations, alongside efforts to streamline environmental reviews and coordinate agencies that often delay projects, Mas said.

The administration is preparing incentives to boost exploration, drawing on models used in countries such as Canada and Australia, he said. The push is aimed at reversing a trend in which rising capital expenditure has largely gone toward sustaining output rather than expanding it, as ore grades decline and projects become more complex.

“Specifically on the topic of exploration, we are going to make a proposal in coming weeks with some incentives,” Mas said. “There could even be some tax incentives.”

At the same time, the government is weighing measures to provide greater certainty for investors, including a form of tax guarantees for large projects, the minister said. Those steps are expected to be part of a broader economic package that will be unveiled in coming days and is designed to lift Chile’s growth rate and generate employment, with mining seen as a central pillar given the scale and duration of investments required.

“We are trying to launch a new version of DL600,” Mas said, referring to a previous decree that established tax certainty and non-discriminatory treatment for foreign investors. It was implemented under the Augusto Pinochet dictatorship and then ended under leftist former President Michelle Bachelet.

Mas said US companies have shown “great interest” in investing in Chile, including in mining operations, smelters and related infrastructure, as part of ongoing talks on critical minerals. The government is also in discussions with firms from other nations, including India, reflecting what the minister described as rising global attention on Chile’s resource sector.

The interest on smelting capacity comes as Chile considers projects led by state mining agency Enami as well as private-sector initiatives, though Mas stressed that any investment would need to be economically sound.

“I have the impression that South America — and particularly Chile — is in vogue,” Mas said. “We have met with many companies that want to invest in Chile, and especially in the sectors of mining and energy.”

(By James Attwood, Matthew Malinowski and Carolina Gonzalez)