Across interviews with industry lawyers and executives, a consistent diagnosis emerges: Chile’s mining constraints are not geological. They are institutional.

Within days of taking office on 11 March, President José Antonio Kast ordered ministers to unblock Chile’s permitting system, targeting 50 pending administrative claims tied to roughly $16bn in projects. This early intervention signals that permitting reform sits at the top of his agenda.

It comes at a moment of sharp contradiction. Mining remains central to the economy, accounting for around 11.6% of gross domestic product in 2025, yet foreign direct investment (FDI) into the sector fell 28.7% year-on-year in 2024, according to a report by Mining Technology’s parent company, GlobalData, entitled Chile Copper Mining to 2030, suggesting that capital is already pricing in regulatory risk. At the same time, mining exports reached $63.3bn (58tn pesos) in 2025, around 59% of total exports, underlining the sector’s continued macroeconomic weight.

For a country that remains the world’s largest copper producer, responsible for roughly 23% of global output, and a central player in lithium, the issue is not resource endowment. It is the ability to execute projects within a predictable time frame.

“Chile’s geology has not deteriorated, but its regulatory environment has,” says René Hurtado, a former mining executive who has held senior commercial roles at Codelco, Anglo American and SQM. “Projects were getting trapped between feasibility and construction because approvals simply took too long.”

That disconnect is visible in the data. Chile holds close to one-fifth of global copper reserves and roughly a quarter of global lithium reserves, according to GlobalData’s Chile Lithium Mining to 2035 report, yet output growth remains modest. Copper production is forecast to grow at around 1.9% annually to 2030, while lithium output is projected to reach roughly 74,000–87,000t by 2035, depending on project execution.

Taken together, the interviews and the data point to the same conclusion: the limiting factor is not what sits underground, but the system above it.

A system defined by time uncertainty

José Domingo Villanueva, a partner at Dentons in Chile specialising in environment and natural resources law, argues that the constraint is institutional rather than geological, with a system that has become procedurally congested and legally uncertain.

“Environmental assessments alone can take an average of nearly three years, in the case of environmental impact studies, often double or triple comparable jurisdictions, and after that, projects can still be delayed by administrative or judicial appeals and the processing of sector-specific permits. There is no certainty on timelines in obtaining the necessary permits to carry out the projects,” he says.

Comparative data reinforces that view. According to GlobalData’s Chile’s Mining Fiscal Landscape: Regulations, Governance and Sustainability, 2026 report, permitting timelines in Chile can extend to as long as 12 years in some cases, well beyond peer jurisdictions, despite reforms aimed at reducing approval times by between 30% and 70%.

That lack of temporal clarity is decisive. “Chile has accumulated a pipeline of projects that are effectively paralysed due to a lack of administrative or judicial decisions. Investment has not declined due to our country's lack of mineral resources but because investors cannot model time or secure legal certainty in project execution,” Villanueva adds.

This uncertainty is increasingly reflected in capital allocation. While Chile continues to dominate global copper supply and remains a critical supplier of battery minerals, project pipelines are not converting into construction at the expected rate. The country’s export performance remains strong, but execution at the project level is lagging.

Time, in Chile, has become an unpriceable risk.

Permisología as structural failure

'Permisología' is often used as shorthand for the complexity of Chile’s permitting system, but according to various interviewees, it is described less as complexity than as inconsistency.

“The main challenge for the new president is to address delays in the permitting system. The implementation of Law No. 21,770 is an essential, but not sufficient, step,” says José Manuel Correa, a partner at Co y C, a Santiago-based boutique law firm specialising in the mining industry.

Chile’s regulatory framework is extensive, involving multiple ministries, the environmental agency (SEA) and the mining regulator (Sernageomin). In principle, the structure is robust. In practice, coordination is weak and decision-making criteria are not consistently applied.

“The Environmental Assessment Service has the legal authority to manage and filter observations. It has simply not exercised that authority with enough discipline,” says Correa.

“In mining permits, Sernageomin has shifted toward over-requesting information without clearly defining the approval standard. That forces companies into short-term planning cycles that are incompatible with how mines actually operate. You end up with a structural non-compliance problem: operations evolve faster than the permits that govern them."

The consequence is a system in which requirements expand over time and where approvals do not provide full certainty. Even after environmental approval, projects must navigate a second layer of sectoral permits, each with its own timelines and standards.

That matters because Chile’s mining sector is highly concentrated. Copper accounted for around 88% of mining export value in 2024, with lithium contributing around 5%, according to GlobalData. When permitting friction affects copper, it affects the entire export base.

Reform without coordination

The Kast administration is not starting from zero. Permitting reform was already under way under the previous government, with legislation aimed at compressing timelines and introducing digital processes.

Villanueva points to early executive action as a signal of intent, but not yet proof of structural change. “On his first day, the president issued a decree to resolve 50 pending administrative claims within 90 days, projects representing roughly $16bn in investment. That tells you where one of the biggest bottlenecks is: not in resources, but in decisions by administrative bodies and courts that delay project implementation,” he says.

“Without coordination between authorities, even good reforms will have limited impact. What Chile ultimately needs is a ‘single window’ approach to permitting and greater clarity regarding the requirements and processing times,” Villanueva adds.

Correa makes the same point more directly. “Administrative correction is the fastest lever available. If Sernageomin defines criteria and the SEA filters inputs properly, you reduce uncertainty without changing the law.”

The government's creation of a dual Ministry of Economy and Mining, led by Daniel Mas (former head of Consejo Minero, a trade body), consolidates decision-making and may help address fragmentation at the top of the system, says Correa.

Whether that translates into more consistent outcomes remains uncertain. The underlying risk is that institutional incentives, rather than formal structures, continue to drive delay.

Lithium: structural uncertainty

Lithium exposes a deeper problem: uncertainty embedded by design.

Chile holds roughly 25% of global lithium reserves and produced around 64,000t in 2025, according to GlobalData. Yet output growth is expected to remain modest, with projections suggesting annual increases of around 1–3% through to 2035.

“Chile’s strength has always been its concession system. In traditional mining, that still provides legal certainty around tenure,” says Felipe Curia, a partner at Co y C.

“Lithium is structurally different because it sits outside the concession regime and is governed through special operation contracts granted by the state. At a constitutional level, these contracts are awarded case by case by the president, which introduces discretion at the point of entry. That discretion is then amplified by the absence of a detailed, standardised regulatory framework.”

Unlike copper, which operates under a well-established concession system, lithium is developed through state-negotiated contracts.

“There is no fully developed regulatory regime for lithium contracts. While the constitution places the formal power of allocation with the president, in practice the design and execution of each process is developed administratively on a case-by-case basis. That combination of presidential discretion and limited procedural standardisation is the core source of uncertainty,” Curia says.

The result is a highly concentrated sector, dominated by SQM – Chile’s largest lithium producer and a long-established operator in the Salar de Atacama – and Albemarle, a US-based specialty chemicals group and one of the world’s largest lithium producers, which operates under a long-term contract in the same basin. Together, the two account for the vast majority of Chile’s lithium output, reinforcing both the sector’s concentration and its slower pace of expansion compared to more open, concession-based jurisdictions.

“This is why recent lithium processes have stalled. It is not just execution failure, it is a structural gap in how the system is designed,” Curia adds.

“The contrast is stark: copper operates under predictable concession rules; lithium depends on negotiated state contracts. Investors price that difference immediately.”

Cost pressures rising

Chile’s copper production recovered to 5.5 million tonnes (mt) in 2024 and is expected to reach 6.2mt by 2030, according to GlobalData, but this growth depends on increasingly complex projects.

“The next wave of copper in Chile will come from deeper sulphide deposits under old oxide mines. You are not just digging another pit. You are redesigning the whole processing chain – crushing, flotation, tailings, water supply – to deal with lower grades and harder rock. That requires technology, capital and operational discipline,” says Hurtado.

Water adds another layer of constraint. In northern Chile, where most mining activity is concentrated, access to fresh water is limited. New projects increasingly rely on desalination, which requires significant upfront investment and additional permitting.

Several major operations have already experienced delays linked to desalination infrastructure and environmental approvals.

As projects become more complex and capital-intensive, the cost of permitting uncertainty increases proportionally.

Execution, not intent

Chile remains one of the world’s most resource-rich mining jurisdictions. It continues to dominate global copper supply and holds a critical position in lithium.

However, investment signals are weakening. FDI has declined. Output growth is modest. Permitting timelines remain volatile.

“If a company cannot determine whether a project will take five years or ten years to permit, capital will go to jurisdictions where that risk is clearer,” says Villanueva.

The challenge for the Kast administration is not to announce reform but to implement it in a way that reduces variability in outcomes. The test is not speed in individual cases but consistency across the system.

“Chile needs to show that it can move from backlog to resolution without undermining environmental and social standards. That is what investors are watching,” Villanueva says.

The decisive variable

Chile still holds structural advantages: scale, geology and an established mining ecosystem, but competitiveness is shifting.

“Ultimately, mining competitiveness is not determined underground," says Hurtado. "It is determined in government policy.”