Chile emerges as a Latin American hub for European SMEs in critical minerals and infrastructure

Chile is seeking to consolidate its position as a business platform for European small and medium-sized enterprises interested in Latin America, combining economic stability, an open trade regime and growing demand for technologies connected to mining, infrastructure, renewable energy and advanced manufacturing.

The opportunity is particularly significant for Italian companies. Chile is the leading Latin American destination for Italian foreign direct investment, while Italy ranks as the sixth-largest foreign investor in the country. Nevertheless, Italian suppliers still occupy a relatively small share of the Chilean market.

According to figures cited by the Italian Chamber of Commerce in Chile, Italy was Chile’s ninth-largest supplier in 2025, exporting goods worth nearly €1.3 billion. Its market share remained close to 2%, far behind China’s 32.7% and the United States’ 17%.

That difference illustrates both the intensity of the competition and the space available for expansion.

Italian companies have an established reputation in industrial machinery, mechanical engineering, chemicals, construction materials, transport equipment and specialised services. These capabilities are increasingly aligned with Chile’s need to modernise mining operations, build new infrastructure, improve water and waste management and develop more sophisticated local supply chains.

Luciano Marocchino, president of the Italian Chamber of Commerce in Chile, considers the current period particularly favourable for companies prepared to make a long-term commitment to the market.

The government of President José Antonio Kast, which took office in March 2026, has placed private investment, employment and faster permitting at the centre of its economic agenda.

Its reconstruction and development bill proposes gradually reducing the corporate tax rate from 27% to 23% by 2029, introducing incentives for formal employment, providing greater tax stability for major investments and simplifying administrative procedures.

Most of the reform has advanced through Chile’s lower house, but parts of the package remain subject to legislative, constitutional and political debate. European businesses must therefore distinguish between measures already in force and incentives that still require final approval.

The more immediate advantage comes from the EU–Chile Interim Trade Agreement, which entered into force on 1 February 2025.

The agreement eliminates tariffs on 99.9% of European Union exports, simplifies rules of origin and improves the conditions under which European companies can provide services and establish operations in Chile. It also includes specific provisions on energy and raw materials intended to support more reliable and sustainable supply chains for lithium, copper and green hydrogen.

For European SMEs, this framework reduces some of the traditional barriers to entering a distant market. It does not eliminate logistical costs or the need for local knowledge, but it makes Chile one of the most accessible economies in the region from a regulatory and commercial perspective.

The European Commission estimates that the modernised agreement could eventually increase EU exports to Chile by approximately €4.5 billion.

The strategic value of the relationship extends far beyond conventional trade.

Chile is the world’s leading copper producer and one of its major sources of lithium, two materials that are essential for power grids, electric vehicles, batteries and renewable energy systems. The country is also exploring opportunities in rare earths and other minerals required by the electronics, aerospace and defence industries.

Lithium is classified as a critical mineral, although it is not technically a rare-earth element. Chile’s potential in actual rare earths is illustrated by the Penco Module in the Biobío region, which received environmental approval in June 2026.

The project is designed to produce an annual average of approximately 811 tonnes of rare-earth oxides, with operations expected to begin in 2027. Its development could generate demand for extraction equipment, water-management systems, automation, environmental monitoring and specialised engineering.

For Europe, these resources have become a matter of industrial security. The objective is not simply to import more raw materials, but to reduce excessive dependence on highly concentrated global suppliers and develop more traceable, sustainable and diversified value chains.

That creates an opportunity for European manufacturers capable of supplying the technologies surrounding extraction: pumps, compressors, valves, industrial software, sensors, processing equipment, recycling systems, electrical components and solutions for reducing water and energy consumption.

Italian energy group Eni has already taken a direct position in this emerging supply chain by agreeing to acquire 25% of Black Giant, the Chilean subsidiary of US technology company EnergyX.

Black Giant is developing a lithium project near the Salar de Punta Negra in northern Chile using direct lithium extraction technology. The method is intended to recover lithium through a closed-loop system and reduce water consumption compared with conventional evaporation ponds.

The underlying development involves phased investment estimated at approximately €193 million. Production is expected to begin at 7,500 tonnes of lithium carbonate equivalent annually in 2028 and eventually reach 52,500 tonnes from 2030.

The agreement also gives Eni the right to purchase up to 25% of the project’s production for a planned stationary-battery factory in Brindisi, southern Italy. The transaction connects Chilean mineral resources directly with a future European industrial facility, illustrating how bilateral investment can extend across the entire value chain.

Enel represents another major Italian presence through Enel Chile, one of the country’s leading electricity generation, distribution and commercialisation businesses.

The wider corporate ecosystem includes Ferrero through its agricultural subsidiary AgriChile, refrigeration specialist Epta, insurer Reale Seguros, construction-materials producer Mapei and logistics group Savino Del Bene.

In total, approximately 274 Italian companies operate in Chile through production or commercial subsidiaries. Around 180 are members of the Italian Chamber of Commerce. Together, these companies generate estimated annual revenue of €6.6 billion and employ approximately 15,900 people.

The figures demonstrate that the Italian presence is already substantial, although it remains concentrated among a limited number of established groups. The next stage of the relationship could involve smaller manufacturers and service providers entering as suppliers, joint-venture partners or subcontractors.

Infrastructure offers one of the clearest routes into the market.

Chile’s 2024–2028 concessions programme identified 43 projects with a combined value of approximately €15.1 billion, covering roads, railways, ports, airports, hospitals, water infrastructure and energy facilities.

These projects require more than large construction contractors. They also create demand for engineering consultancies, industrial components, electrical systems, digital monitoring, building materials, waste-treatment technology, logistics and maintenance services — areas in which European SMEs can compete through specialisation rather than scale.

A renewed mining-integration initiative with neighbouring Argentina could further reinforce Chile’s role as a regional platform.

In August 2026, the two countries advanced protocols for three cross-border copper projects: Vicuña, NexoAndino and Filo Sur. The framework could unlock investment estimated at approximately €17.8 billion and add 540,000 tonnes to annual copper production.

The agreement enables mining operations in Argentina’s Andean provinces to use Chilean ports, energy networks and transport infrastructure. For suppliers, this means that a base in Chile could eventually provide access to projects extending across both sides of the Andes.

The commercial opportunity nevertheless requires a realistic strategy.

Chile cannot be treated merely as a destination for occasional exports. Industrial clients expect after-sales support, reliable spare-parts availability, technical assistance and the ability to respond quickly when equipment fails. Distance from Europe makes inventory planning and local service capacity particularly important.

SMEs entering the market may therefore need a Chilean distributor, commercial partner or local subsidiary. Participation in public tenders and large mining contracts also demands knowledge of certification requirements, financing mechanisms, environmental rules and procurement procedures.

Competition based solely on price remains difficult, particularly in medium-range consumer goods and standardised industrial products. Chinese suppliers benefit from scale and strong commercial networks, while US companies retain geographic and financial advantages.

European companies are more likely to succeed by competing in segments where reliability, efficiency, engineering quality, environmental performance and long-term operating costs carry greater weight than the initial purchase price.

Environmental and social considerations are equally important. Mining projects in Chile face increasing scrutiny over water use, biodiversity, indigenous rights and their relationships with surrounding communities. Suppliers capable of reducing emissions, recovering materials or improving resource efficiency may therefore hold a stronger competitive position.

Chile’s attraction as a hub ultimately rests on a combination of factors: institutional continuity, an extensive network of trade agreements, access to critical minerals, investment pipelines and a business culture familiar with international companies.

It is not an automatic gateway to every Latin American market, each of which maintains its own regulations and commercial conditions. However, Chile can serve as a stable operational base from which European businesses develop regional experience, partnerships and technical capabilities.

The gap between Italy’s €6.6 billion corporate presence and its modest 2% share of Chilean imports shows how much potential remains untapped.

For European SMEs, the most promising opportunity is not simply selling more products to Chile. It is becoming part of the industrial system developing around its mines, energy networks, transport corridors, cities and emerging critical-mineral value chains.

If those companies are prepared to invest in local relationships and remain for the long term, Chile could become one of Europe’s most important business bridges to Latin America.