Chile Swings Right: What the New Mining Era Means for Investors

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1. Ownership and Share Structure Information

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José Antonio Kast has been elected Chile's 38th president following a runoff vote held on December 14. Kast, leader of the Republican Party and a long-time figure on the far right of Chilean politics, secured 58.3% of the vote, defeating Jeannette Jara of the governing center-left coalition, who received 41.7%. According to PBS on December 14, Jara conceded shortly after polls closed, stating, "Democracy spoke loud and clear. I have communicated with José Antonio Kast and wished him success for the good of Chile."

Kast's victory marks Chile's sharpest political shift to the right since the end of the Pinochet dictatorship in 1990. As reported by Reuters on December 14, he leveraged voter concerns over rising crime and migration to build momentum throughout the campaign, ultimately consolidating support from a fragmented right-wing electorate.

This election was the first since 2012 to include compulsory voting, expanding participation among Chile's approximately 15.7 million eligible voters. According to The Guardian on December 14, previously disengaged voters played a pivotal role in the first round and contributed to the dynamics of the runoff.

Kast will succeed outgoing President Gabriel Boric, who was elected in 2021 as Chile's youngest president. Barred by law from seeking a second term, Boric leaves office after a single four-year mandate defined by progressive reform efforts and falling approval ratings. As noted by Al Jazeera on December 14, Kast's inauguration is scheduled for March 11, 2026.

Mining Policies Under President Gabriel Boric (2022–2026)

During his term in office, President Gabriel Boric pursued a resource policy centered on greater state involvement in Chile's mining sector, particularly in lithium. On April 20, 2023, Boric announced Chile's National Lithium Strategy, a long-anticipated framework to restructure the country's lithium industry through public-private partnerships with increased state control. According to Mining.com on April 21, the strategy called for the creation of a national lithium company and mandated that the state hold majority ownership in all new lithium projects.

Initially, state copper company Codelco was tasked with negotiating new contracts on the state's behalf. In the future, a dedicated lithium company was expected to assume this role. Boric emphasized the urgency of the transition, calling lithium "an opportunity for economic growth that will be difficult to beat in the short term." He also expressed hope that current producers, such as Albemarle Corporation (ALB) and Sociedad Química y Minera de Chile SA (SQM), would voluntarily negotiate state participation prior to the expiration of their contracts in 2043 and 2030, respectively.

The government emphasized the use of direct lithium extraction (DLE) technology, which consumes significantly less water than traditional evaporation pond methods. This shift was framed as both environmentally responsible and vital to Chile's long-term role in the global green energy transition. According to the Chilean government's official National Lithium Strategy document, the goal was to align economic development with environmental sustainability and community engagement, with private companies expected to contribute innovation, capital, and market access while operating under state-led development frameworks.

Beyond lithium, Boric also advocated for reforms in copper and mining taxation. As reported by S&P Global Market Intelligence on December 21, 2021, he supported higher royalties and mining taxes to fund expanded social programs. His administration opposed large-scale developments such as the Dominga iron-copper-gold project and stressed the need for stronger environmental protections. While the proposals received support from environmental advocates, analysts noted that legislative checks and a divided Congress were likely to moderate the scope of any reforms.

Although Boric's presidency marked a clear ideological shift, the practical impact of his mining agenda remained constrained by political and market forces. According to Moody's Investors Service, the proposed tax reforms faced significant political and technical obstacles. Meanwhile, analysts at Fundamental Research Corp. suggested that investor uncertainty over regulatory changes could delay new project development, though no material long-term damage to the sector was expected.

Mining Policies Under President-Elect José Antonio Kast

President-elect José Antonio Kast is expected to reverse many of Gabriel Boric's state-centric mining policies in favor of a more market-friendly approach. As reported by Bloomberg News on June 21, Kast criticized Boric's lithium strategy, arguing that government-led control would hinder investment and delay Chile's competitiveness in the global energy transition. He has stated that private companies are better positioned to maximize the value of lithium resources and opposes the creation of a national lithium company.

Kast's platform includes expanding private sector participation across the mining industry, streamlining regulation, and promoting fiscal sustainability. According to Bloomberg on September 4, his administration plans to conduct a full review of Codelco, the debt-laden state copper producer, which currently carries debt at approximately six times its EBITDA. Although privatization is not on the table, Kast supports increasing joint ventures with private firms to reduce financial pressure without compromising state ownership.

The incoming administration has also indicated it would evaluate the pending Codelco-SQM lithium partnership if it is not finalized before the transfer of power. Kast has pledged to respect signed agreements but maintains that terms should be revisited if necessary to protect the national interest.

As noted by Reuters on December 14, Chile's stock market, peso, and equity benchmarks all rose following Kast's election, reflecting investor optimism over anticipated deregulation and greater legal certainty for mining companies. The market response suggests confidence that Kast's pro-business stance will boost foreign investment and ease the policy uncertainty that characterized the Boric era.

Amid the shift in mining policy under President-elect José Antonio Kast, several companies with exposure to Chile's copper and lithium sectors are already positioned to adapt. Here are three companies operating in Chile that may be directly affected by the new administration's approach to regulation, partnerships, and investment frameworks.

Rio2 Ltd.

Rio2 Ltd. (RIO:TSX; RIOFF:OTCQX; RIO:BVL) is advancing its flagship Fenix Gold Project in Chile's Maricunga Gold Belt, positioning itself as a near-term producer with significant expansion potential. The project is fully permitted and funded for initial development, with first gold production targeted for January 2026. In its current form, the heap-leach operation is expected to produce 82,000 ounces of gold annually, with plans underway to expand that output to 300,000 ounces through staged scaling. 

To support its growth strategy, Rio2 has signed memoranda of understanding (MOUs) with two companies to assess the supply of desalinated water from facilities in Copiapó. As reported by Atrium Research on September 24, 2025, the initiative could enable Rio2 to triple production by addressing a longstanding water access challenge. Each company is conducting a four-month conceptual study, after which Rio2 will select one for a formal feasibility study. If successful, the agreement would support a five-year expansion plan targeting throughput of 80,000 tonnes per day.

The expansion strategy involves completing a prefeasibility study in Q1/26, updating mineral reserves in Q4/26, and finalizing a feasibility study in the second half of 2027. The company aims to approve and fund the expansion by early 2029, with production ramp-up expected by late 2030. According to Atrium Research, achieving these milestones could more than double the project's net present value and materially increase Rio2's valuation as investor confidence in the expansion solidifies.

On December 15, Rio2 announced the closing of an upsized bought deal equity financing for gross proceeds of CA$191 million, or approximately US$138 million. According to the company, the funds will be used to support the cash portion of its planned acquisition of the Condestable Mine and for general corporate purposes. The offering consisted of over 86 million subscription receipts priced at CA$2.22 each and was underwritten by Raymond James, Stifel Canada, and BMO Capital Markets. The proceeds will be held in escrow until the acquisition closes, expected in January 2026. If the conditions to close are not met by March 31, 2026, investors will be refunded their original investment plus interest.

In parallel with its development efforts in Chile, Rio2 has made a strategic investment in Royal Road Minerals Ltd. (RYR:TSXV). On September 26, 2025, the company acquired a 15% stake in the early-stage explorer for CA$4.58 million. Royal Road holds copper and gold projects in Colombia, Morocco, and Saudi Arabia. On September 29, Cantor Fitzgerald reported that the investment offers Rio2 geographic diversification and exposure to multiple exploration-stage assets, while reinforcing its optionality beyond the Fenix asset.

The Royal Road transaction also grants Rio2 the right to maintain its 15% interest in future financings and nominate a board member if it retains at least a 9.5% stake. Rio2's Executive Chairman Alex Black noted that the move aligns with the company's interest in porphyry-style deposits and builds on the team's prior success at Rio Alto's La Arena project in Peru. Despite the diversification, the Fenix Gold Project remains the company's primary focus.

Rio2 has attracted positive coverage from multiple analysts, with recent reports highlighting both near-term production potential and long-term expansion upside. Atrium Research analyst Ben Pirie maintained a Buy rating and a target price of CA$2.40 per share in a September 24 report, calling Rio2 "one of our top ideas" and noting that an expansion at Fenix could more than double the project's net present value.

In a segment featured by Mining Network on December 8, Rio2 Ltd. was described as advancing "the largest permitted fully funded gold heap leach project in the Americas." The video noted that construction at the Fenix Gold Project was "nearing completion on time and on budget," with first gold pour targeted for January 2026.

On December 9, Atrium Research analyst Nicholas Cortellucci, CFA, maintained a Buy rating on Rio2 Ltd. and raised the firm's price target from CA$3.30 to CA$4.00 following the company's Condestable acquisition. Cortellucci called the deal a "game-changer" for Rio2, highlighting its immediate EBITDA contribution and the geographic diversification it brings to the company's portfolio.

That same day, Cantor Fitzgerald analyst Matthew O'Keefe issued a Hold rating on Rio2, maintaining a CA$2.50 price target. O'Keefe noted that the investment offers geographic diversification and exposure to multiple exploration-stage assets, while reinforcing Rio2's optionality beyond the Fenix asset.

Rio2's approach has been capital efficient. Construction at Fenix was reported to be on time and under budget, a rarity among developers, with material already being placed on the leach pad. According to Cantor Fitzgerald, Rio2 continues to trade below peers on a net asset value basis despite its near-term cash flow outlook and fully financed status. The company has structured a US$100 million prepay facility and a US$25 million gold stream with Wheaton Precious Metals to fund construction and working capital.

¹About 8% of the company is owned by insiders and management, about 7% by holding companies, and about 23% by institutions. The rest is retail.

Top shareholders include Mackenzie Investments with 8.74%, 2176423 Ontario Ltd. with 7.3%, Knowave AG with 4.62%, Alexander Black with 4.27%, and SSI Wealth Management AG with 3.29%.

Its market cap is CA$639.44 million with 425.55 million shares outstanding. It trades in a 52-week range of CA$0.50 and CA$1.64.