Foreign miners eyeing Chile's world-leading lithium reserves may benefit from right-wing president-elect Jose Antonio Kast's victory on 14 December, while a key approval eases uncertainty about a pending deal between lithium producer SQM and state-owned mining company Codelco.
Kast, Chile's new president plans to overhaul the national lithium strategy, which dates from outgoing left-wing president Gabriel Boric's administration. This adds to Kast's pro-market campaign promise to streamline the approval process for mining permits aiming to expedite investments in copper and lithium.
If the newly elected president keeps his word, foreign companies could get access to Chile's large lithium reserves more easily, rekindling development of its stagnant lithium industry.
Chile's restrictive lithium laws make it difficult for companies to operate independently, as 1979 legislation classifies lithium as a nuclear material, meaning firms can only mine it after obtaining a special operating contract known as a CEOL — which can take years to be approved.
Under Boric's lithium strategy, companies seeking to explore lithium resources in the Atacama region must also form a joint venture (JV) with a state-owned Chilean firm, on top of securing the CEOL, further complicating entry for private and foreign investors.
Kast has repeatedly said that he would make lithium "concessionable," meaning it would cease to be a nuclear material, which is subject to increased oversight. This would allow interested companies to extract it through a regular concession with a new, streamlined approval process, thus facilitating foreign investment and overruling Boric's CEOL-based lithium strategy.
For that to happen, he would need to alter a pair of clauses of the national mining code, rectifying the changes through law. He has the full support of Chile's mining chamber to do so, but any changes would have to go through both congress and the senate, where his allies are a minority.
Changing the national lithium strategy might not be a priority itself for Kast, but it can be bundled into his larger project of boosting mining through streamlined permitting and tax cuts, something he wants to achieve in his first 18 months in office.
Kast takes the presidential seat on 11 March, but the governmental transition began on 15 December, a day after the election.
Chile, the world's second-largest lithium producer, has failed to establish any new lithium extraction projects other than those of Albemarle and SQM, which have dominated the domestic industry since 1984 and 1997, respectively. It has long been Latin America's leading lithium producer, but some forecasts see Argentina catching up by 2030.
Albemarle and SQM will continue to be the only producers in Chile until at least 2032, when Rio Tinto is scheduled to begin production at its Altoandinos project, or in the event that SQM's project changes hands.
Chilean exports of lithium carbonate and hydroxide declined nominally in 2025 through November to 235,365 metric tonnes (t), down from 240,237t in the same period in 2024, according to customs data.
SQM-Codelco almost clear of risk despite election
Although Kast has publicly opposed the SQM-Codelco joint venture, he has said he would honor the agreement if it is legally signed by the time he takes office, a condition that now appears close to being met.
Chile's comptroller general's office (CGR) has acknowledged the legality of the contracts that underpin the partnership between Chilean private company SQM and state-owned miner Codelco, which would allow SQM to continue lithium exploration in the Atacama salt flats until 2060.
CGR's acknowledgement was the last external approval that the joint venture needed to materialize. Codelco said that it and SQM will now move forward to the deal's closing stages.
The deal still could be overturned if the companies fail to close by 11 March, but that risk is slim.
