Mining boom masks Chile's employment crisis as government scrapes by with reform votes.

The Senate approved in the early hours, by a razor-thin margin of 26 votes in favor and 24 against, the so-called miscellaneous law or national reconstruction megareform, and that narrow result says everything about the state of Chilean political economy: a government that needs to grow but can barely muster the votes to make it possible. Approval of the bill—which now moves to a third reading in the Chamber of Deputies—stands as the dominant event of the day, not only for its content but for the tension it embodies between the urgency of reactivating an economy that refuses to lift off and the fragility of the political consensus required to do so.

Finance Minister Jorge Quiroz welcomed the advance with evident relief. "Chile needs to grow and this project makes it possible," he declared, listing the initiative's five pillars: reconstruction of the areas affected by the fires in Ñuble, Biobío and Valparaíso; reactivation of the construction sector; recovery of tax competitiveness; regulatory streamlining; and fiscal responsibility. Among the most relevant measures are the cut in the corporate tax, tax invariability for investment projects exceeding USD 50 million—extendable up to 20 years on a graduated scale according to the amount—and a targeted employment credit. Several of these provisions will take effect immediately upon promulgation; the property tax exemption for senior citizens, by contrast, will be deferred until January 2027.

Tax invariability is already generating its own controversy. Opposition legislators are threatening a possible challenge before the Constitutional Court, arguing that the measure "ties the hands" of future lawmakers. The debate is philosophical as much as legal, and for now does not appear to have solid constitutional grounding: the Constitution does not prohibit the legislator from offering long-term certainty to investors, and what the norm pursues—attracting capital in sectors such as mining, energy, telecommunications and infrastructure—is perfectly consistent with the right to free economic initiative. SOFOFA, for its part, quantifies the potential of the four-percentage-point corporate cut: its Public Policy Directorate estimates that reducing the First Category Tax from the current 27% to 23% could generate between 80,800 direct jobs in the conservative scenario and more than 330,000 in the most optimistic scenario for the 2026-2030 period, based on an increase in investment of roughly USD 6.7 billion.

That urgency around employment is not rhetorical. Chile has nearly one million unemployed, of whom 440,000 are women and 240,000 are young people, with roughly a third unable to find work for more than twelve months. And here emerges the day's most unsettling paradox: the mining sector, whose copper was trading Thursday at USD 6.38 per pound on Comex futures—a figure that in any other context should translate into widespread bonanza—has accumulated months of simultaneous declines in the sectoral Imacec and in employment, with a net loss of 15,000 jobs so far in 2026. The boom in the red metal's price is not spilling over into jobs; this suggests an industry operating with greater automation, less personnel and a cost structure that pushes headcount downward even in favorable price cycles.

BHP illustrates that tension with precision. The miner reported production of 1.95 million tonnes of copper in its 2026 fiscal year, 3% less than the previous year, and projects between 1.65 and 1.8 million tonnes for 2027 due to lower ore grades at Escondida. In parallel, it is advancing the restart of Cerro Colorado and approved two projects at Spence, which keeps investor interest in Chile intact but confirms that large-scale mining will not be the engine of mass job creation that some expect.

The export sector of the Biobío region adds another flank of concern. Regional exports fell 16.1% in May, dragged down by a plunge of more than 34% in shipments to the United States, according to the INE, with a cumulative decline of 4.6% in the first five months of the year. Industrial contraction and weaker North American demand are the phenomena with the greatest impact, and Biobío's ports face an additional problem today: Directemar has maintained an alert for heavy swells from Huasco to the Golfo de Penas through Saturday, July 18, with expected impact on export logistics. The disruption is transitory, but it underscores the vulnerability of a region whose economy was already under pressure before the storm.

In financial markets, the session unfolded with relative calm. The peso closed slightly weaker against the dollar, in line with a global depreciation of the U.S. currency—the dollar index was down 0.38%—while the IPSA lost ground and closed at 10,948.74 points, moving away from 11,000. Notable gainers were Latam Airlines with 2.01%, Engie Energía Chile with 1.98% and Colbún with 1.37%, all three benefiting from expectations of a winter with heavier precipitation that would improve hydro generation. Analysts anticipate better momentum for these utilities heading into the El Niño phenomenon, which could ease pressure on energy costs and improve operating margins.

On the foreign investment front, the government convened an inter-ministerial working group to evaluate the implementation of a screening mechanism for foreign investment in strategic sectors, coordinated by Subrei. The initiative responds to global trends—the United States, Europe and Australia have all reinforced their own review mechanisms in recent years—but its design will need to be careful so as not to contradict the signal of openness that tax invariability seeks to project. The simultaneity of both measures reflects a real tension in the strategy for attracting capital.

In the pension system, implementation of the generational funds continues to generate technical noise. The CAIA association warned that the 20% cap on alternative assets "makes no sense" and that the established benchmark will push AFPs toward lower-risk strategies, sacrificing return potential. Undersecretary Elisa Cabezón is reinforcing her team for the implementation challenges with the addition of Cristóbal Doberti, formerly of BlackRock, as capital markets advisor. The future AFP Multiplica, for its part, is asking that the original timeline for the tender of the stock of affiliates—scheduled for August 2027—be preserved, resisting any delay that could benefit the incumbent operators.

What lies ahead deserves attention on several fronts simultaneously. The Chamber of Deputies will need to vote next week on the articles modified by the Senate in the megareform, and an eventual rejection or new modification would reopen a legislative process that the government needs to close. The projections