The climate for mining and hydrocarbons investment in Peru is poised for change no matter who wins a 6 June presidential election pitting two political extremes at a time of record human loss from Covid-19.
From the left, rural schoolteacher and union leader Pedro Castillo wants to rewrite the country's 1993 constitution and give the state a greater role in natural gas and mining projects. He is an admirer of neighboring Bolivia's 2006 hydrocarbons nationalizaton, a model he would apply to Peru's Camisea gas complex operated by Argentina's Pluspetrol.
Castillo would raise mining taxes and royalties, renegotiate tax stability agreements with 25 big mines, and give local communities a greater say in whether mines are developed. Peru is the world's second largest copper producer after Chile.
From the right, Keiko Fujimori would leave Camisea, the Peru LNG liquefaction complex and mining projects in private-sector hands. Her plan calls for a "voluntary contribution" negotiated with mining companies. Late former president Alan Garcia instituted a voluntary payment plan during the last mining price bonanza in the late 2000s.
Fujimori also proposes earmarking a percentage of mining tax revenue for direct cash payments to residents in mining zones.
Daughter of former strongman president Alberto Fujimori and a target of corruption investigations, she is making her third bid for the presidency. She lost in 2011 and 2016 and has moved further to the right in each race.
In final polls, Castillo holds a slight lead over Fujimori. Castillo's support base is rural Peru, while Fujimori is the favorite in Lima.
The two candidates were the top vote-getters in 11 April elections, but neither garnered a large enough margin to win outright. Results could be issued within hours of polls closing if the final tally is not close.
Fleeting sash
Whoever wins will inherit a pandemic-battered economy and a legacy of political turmoil that has given Peru four presidents in the past five years. GDP crashed by 11pc in 2020 and many Peruvians fell into poverty, a dark pandemic-era pattern seen across Latin America.
President Francisco Sagasti's caretaker government vastly revised up the number of deaths from Covid-19 from 70,000 to nearly 185,000 as of 1 June. Peru now has the world's highest per capita mortality rate, according to Johns Hopkins University.
Sagasti will transfer the presidential sash to his successor on 28 July.
