Miners see potential in Chile's regulatory overhaul — if it delivers

Mining industry participants see promise in Chile's new permitting reform bill, but some remain skeptical of how much the law will trim regulatory timelines and speed up mine builds.

Chile is a major global copper and lithium producer, but its share of global copper output is declining and the government wants to boost mining as an economic pillar supporting government services. The regulatory revisions could play an important role in Chile's push to attract mining investment and accelerate mine development amid the country's ambitions to expand lithium production and stanch its shrinking market share in copper.

The government expects the Sectoral Authorization Framework Law, which was approved July 1 by Congress but must still be signed into law, to cut processing times for some permits by between 30% and 70% as part of an overhaul of the country's permitting regime. The law creates a centralized office for handling sectoral permits, new deadlines for regulators and other rules that aim to limit bureaucratic delay. Some miners are skeptical the law will meet its goals, but the industry expects the move to boost the Chilean economy.

"I consistently say the rhetoric is fantastic and I'm waiting to see whether the actions match the rhetoric," said Hayden Locke, president and CEO of Marimaca Copper Corp., a Canadian company permitting the Marimaca copper project in Chile. "And I've been pleasantly surprised that it has started to match the rhetoric."

After the country backed off unpopular constitutional reforms and plans for stiffer royalties in the early 2020s, miners have committed to large investments in Chile. Freeport-McMoRan Inc. outlined plans in 2024 for a $7.5 billion expansion of the El Abra mine. In May, Chilean state miner Empresa Nacional de Minería made a deal to work with Rio Tinto Group in the lithium sector.

Shoring up copper

Chile is the world's top copper producer by a wide margin, but its output has stagnated in recent years. The country's share of global mined copper output dropped to 23.5% in 2024 from a recent peak of 28.1% in 2018, according to S&P Global Market Intelligence data. Chile produced 5.4 million metric tons of copper in 2024, down 7.2% from the 2018 peak.

"The reduction in the processing time for all investment projects would have an economic impact," said Manuel Viera, president of Chile's Chamber of Mines, an organization that advocates for the mining sector.

The group estimates that the law will boost GDP growth by between 1% to 1.5% over 10 years, about half the 2.4% projection made by the Chilean government, Viera said.

Faster permitting can mean reaping the rewards of investments more quickly.

"For example, a high-voltage transmission line that mining companies need, which used to take four to five years, will now be around three years and eight months, meaning it will be reduced by 31%," Viera said.

Centralized control

The law could shorten the time it takes for a mining project to get to production, according to industry experts.

Chilean mines took an average of 12.7 years to reach production, faster than the global average of 15.5 years, according to an April 3 analysis by S&P Global Commodity Insights' Metals and Mining research team, which looked at lead times in recent decades.

Average lead times rose to 17.2 years from 2010 to 2019, compared with seven years between 1990 and 1999. But Chile pushed its lead times down to 15 years between 2020 and 2024 and the new law could further shorten the process.

Chilean mines can require between 380 and 500 permits from 37 different authorities, the government said. The new law will expedite permits for technical documentation, plans, closure plans, hydraulic works and permits with local governments.

"Hopefully it makes their job a bit easier to go through this process and assess projects and make decisions," Marimaca's Locke said. "When there's regulatory burden, and you're a bureaucrat, the risk of making the wrong decision is pretty significant for them."

The reforms also include consequences for bureaucratic inaction. If the relevant authority does not respond within a certain time frame, a permit could be granted automatically, said José Tomás Mery, a senior associate focused on mining and environmental law at Morales & Besa.

Once published in the government gazette by Chilean President Gabriel Boric, agencies responsible for the permits will have four months to establish regulations.

"Perhaps the most important part of the operation of this law has to do with the issuance of a regulation by the Ministry of Economy that will classify all the permits that fall under this system," Mery said. "To issue that regulation, the ministry has a period of four months from the publication of the law."

A single system and office under the Ministry of Economy will process the sectoral permits covered by the coming regulations.

Environmental review timelines

Meanwhile, industry participants pointed out the law leaves environmental assessments, a key part of the regulatory process, untouched. Environmental assessments remain a bottleneck in the permitting regime, Viera said.

Environmental assessment is a separate process that requires gathering data, studying the potential impact of a project, and weighing environmental costs and economic benefits. Making changes to this part of the regulatory process would present a bigger challenge to lawmakers and likely face greater public scrutiny.

Chile has learned from experience in addressing how to mitigate environmental risks from mining, Marimaca's Locke said.

"I would say it's as rigorous a process that we've gone through as any other jurisdiction that I've worked in," Locke said.

Mixed miner reactions

Locke praised Chile for the legislation and expanding regulatory transparency, and said the law could help boost investor confidence, leading to more mining investment.

"Chile wants to remain the top producer of copper and I think they recognize the challenge they face to achieve that," Locke said. "They've got to attract the capital. They've got to attract your investment. They've got to attract exploration dollars. And they've gone a long way to improving investor sentiment amongst big companies."

Chilean state miner Codelco said via email that it was premature to comment about the regulations. The Chilean government did not respond to a request for comment by press time.

The impact of the law on the mining sector hinges on details such as how many permits fall under the system and how regulators handle the new rules, experts told Platts, part of Commodity Insights.

"Changes on paper may not make any real-world changes or could be very slow to see benefits," Kevin Murphy, director of Metals and Mining Research at Commodity Insights, said in an email.

A big portion of the law's implementation will depend on the regulations that have yet to be written, Daniel Weinstein, a senior associate at Morales & Besa, said in an interview with Platts. Weinstein said the impact on industry is uncertain as a result.

"If we do our work, we want to see the timelines adhered to," Marimaca's Locke said. "And I think that's going to be the most important part of these reforms."

The Chilean Mining Chamber said court challenges could hinder investment.

"No concrete measures have been contemplated to address the uncertainty arising from the increasing litigation affecting mining projects," Viera said. "What we want is legal certainty, fiscal stability and security for the execution of all project activities."

Critics of the law, such as the Network for Action on Environmental Rights, warned that the measure will affect Indigenous communities.

"The law only favors business sectors, leaving communities and ecosystems in a situation of high vulnerability and lack of protection," the group said in a July 26 statement.