(Bloomberg) — The first-round winner of Peru’s presidential election wants to renegotiate contracts with mining companies rather than seize assets, a party official said.
While Free Peru’s official political platform mentions taking control of natural resources, its candidate Pedro Castillo isn’t looking to nationalize the mining industry, and welcomes private investment, the party’s legal representative Ana Maria Cordova said by telephone.
Castillo, who will announce some “adjustments” to his platform, wants a bigger share of company profits to benefit Peruvians, Cordova said. To be sure, Castillo, a little-known rural schoolteacher before the election, wants to ensure certain resources better serve the local population, she said, citing some of the the highest gas prices in South America despite Peru being a major producer.
“Not to expropriate them, not to nationalize or anything, but so that the conditions in some way also favor populations where these industries or mining operations are involved,” she said. “It is simply renegotiating conditions so that they somehow improve in favor of the population.”
Castillo will face right-wing candidate Keiko Fujimori in a June 6 runoff vote. Fujimori, with the Popular Force party, has warned that her rival’s plans to rewrite the constitution and take over strategic companies make him a danger to democracy in the second-biggest copper-producing nation.
Either outcome is set to increase the risk-premium for investing in Peru, resulting in less investment and less copper supply over time, helping the price of the metal, according to Jefferies analyst Christopher LaFemina. Peru accounts for 11% of global copper mine supply, and is also a major producer of zinc, silver and gold.
Private capital “won’t be touched,” with the government simply looking for a bigger share of profit, Cordova said.
“The government plan remains the same, what will be done are detail clarifications, and obviously based on the conversations with the other political organizations, there may be some flexibility,” she said.