Chile's presidential elections: Who is running and what is at stake

Chile's upcoming presidential election, featuring mandatory voting, is set to proceed to a December run-off, likely pitting leftist Jeannette Jara against far-right Jose Antonio Kast, with Kast currently favored to win. This election is critical as it also determines legislative control; a right-wing victory in both the presidency and legislature would mark the first such consolidation since 1990, potentially enabling significant constitutional reforms. The outcome holds substantial implications for Chile's vital mining sector, with Jara proposing expanded state involvement in lithium via Codelco, while Kast advocates for auditing the state copper giant and mining companies push for streamlined environmental permitting.

Analysis

Chile's upcoming presidential election, featuring mandatory voting, is poised for a December 14 run-off, likely between leftist Jeannette Jara and far-right Jose Antonio Kast, with Kast currently favored. This election is critical as it coincides with legislative elections, where the entire 155-member lower house and 23 of 50 Senate seats are contested. A right-wing victory in both the presidency and legislature would mark the first such consolidation of power since 1990, potentially enabling significant constitutional reforms if a four-sevenths majority is achieved.

The outcome holds substantial implications for Chile's vital mining sector, the world's largest copper and second-largest lithium producer. Jara proposes expanding state involvement in lithium through Codelco, while Kast advocates for auditing the state copper giant. Mining companies are actively pressing candidates for streamlined environmental permitting to boost production.

Key policy divergences include Jara's focus on boosting minimum wages and workers' rights versus Kast's emphasis on immigration control and security. The potential for a significant shift in political power, coupled with the high abstention rate in the 2021 election and current voter apathy, introduces a notable wild card into the election's final outcome. The overall neutral sentiment and moderate market impact score reflect the current uncertainty surrounding the election's ultimate implications.

Key Decisions for Investors

• Monitor the December 14 run-off election results closely, as a right-wing presidential and legislative victory could lead to significant policy shifts, including potential constitutional reforms and changes in regulatory approaches to key industries.
• Assess exposure to Chilean mining assets, particularly those in copper and lithium, considering the differing stances of candidates on state involvement (Jara's Codelco expansion) and regulatory streamlining (industry's permitting push).
• Evaluate potential impacts on labor costs and social stability, given Jara's proposals for increased minimum wages and workers' rights, or Kast's focus on security and immigration, which could influence operational environments.