Gabriel Boric, a 35-year old former student leader, became Chile’s next president defeating right-wing opponent Jose Antonio Kast. With 56% of the votes, Boric defeated Kast by more than 10%, giving a strong mandate for a platform that could put billions of mining investment at risk.
Before the election, the government had projected mining investments of about $70 billion through the end of the decade, most from private firms. Some estimates state that Chile would need US$150 billion in investment to reach its goal of doubling copper output by 2050.
Chile announced plans on Oct. 13, 2021 to auction five new lithium developments, with a quota for each of 80,000 tonnes of lithium metal equivalent annually, potentially unlocking lithium reserves outside the country's largest salar, the Salar de Atacama.
The new projects, which would take around decade to put into production, could produce as much as 100,000 tonnes of lithium carbonate equivalent for the global market each year, increasing Chile's production by 71% above 2021 forecast levels, according to S&P Global Market Intelligence.
Last year Chile produced a third of the world’s copper and is the world’s second largest producer of lithium. The Andean nation also is home to large zinc, molybdenum, gold, silver and lead reserves.
These rosy projections betray the rocky political landscape the country’s mining industry faces.
The Chilean Senate in August delayed a vote on a bill that would force mining companies to pay more for mining after BHP, Anglo American and Lundin Mining expressed concerns over the legislation, according to published reports. The bill, which would have added a progressive royalty to sales of lithium and copper, was approved by the lower house earlier in May.
Boric’s platform rested largely on a critique of Chile’s market-oriented economic system that dates back to the dictatorship of General Augusto Pinochet, which is credited for driving decades of growth but also creating massive inequalities. He centred his campaign on promises of an egalitarian, feminist and ecological Chile.
“If Chile was the cradle of neoliberalism, it will also be its grave,” Mr. Boric said earlier this year. “Don’t be afraid of the youth who want to change Chile.”
Boric is leaning towards a more active role for the State in the mining industry, as well as higher royalties. State-owned Codelco is the world largest copper miner, but there are many large multinationals in Chile’s copper sector including BHP, Glencore, Anglo American and Antofagasta this would affect.
During his victory speech, Boric, who is part of a broad leftwing coalition that includes the Chilean Communist party, said he would oppose mining initiatives that “destroy” the environment.
Boric opposes the $2.5-billion Dominga mining project that was approved this year. The mining project would be is located ~500 km north of the capital Santiago, near ecological reserves.
Boric has said that he would look to create a state lithium firm and criticized privatization of the sector.
Current exploration for lithium in Chile is focused in the Salar de Atacama, and to a lesser extent the Salar de Maricunga. Much of the mining has been managed by state-owned Codelco, with Albemarle and Sociedad Química y Minera (SQM) de Chile SA as major producers.
How Boric ultimately deals with the country’s mining industry is to be seen but according to Chilean sociologist Eugenio Tironi quoted in the Financial Times, “Chile has definitely changed”, who added that the forces that had ruled the country for three decades “were displaced to secondary places”, and that there had been “a radical rejuvenation of the political class”.
Diego Pereira, an economist at JPMorgan Chase quoted in the Financial Times doubted the markets would be forgiving for this leftward shift: “I don’t think the markets, particularly locals, are going to give him the benefit of the doubt...During the transition period, he will be forced to take actions to show that [he’s] going to moderate.”
While election campaigning often brings out political extremes, Boric’s acceptance speech was a call for unity, saying he will represent all Chileans. “I am going to be the president of all Chileans, whether you voted for me or not,” said Boric.
Boric, who will take office on March 11, received an amicable concession speech from the losing candidate. “From today [Boric] is president-elect of Chile and deserves all our respect and constructive collaboration,” Kast said, after polls closed. “Chile always comes first.”
The Wall Street Journal reported that Chile’s National Mining Society, Sonami, said in a post-election statement that voters have “sent a clear message” about the need to continue Chile’s economic and social development.
“We trust that the spirit of programmatic convergence, moderation and openness to dialogue shown during the last week of the campaign will prevail,” the statement commented further.
The Financial Times editorial board summarizes succinctly the hopes of stakeholders in Chile.
"Chileans — and international investors — will be hoping that Boric can master an elusive combination of radicalism, competence and realism."
There are over 246 technical reports on Prospector Portal for projects in Chile.