Peru’s presidential election has entered its final stretch with polls showing a dead heat between frontrunner Keiko Fujimori and leftist challenger Pedro Castillo. The contest, however, is being overshadowed by a deepening security crisis that threatens to destabilise the country’s critical lithium mining sector. Sir Mark Lyall Grant, the UK’s trade envoy to Peru, has warned that supply chains for battery-grade lithium could face severe disruption if violence escalates after the vote.
Peru holds the world’s third-largest lithium reserves, but extraction has been hampered by illegal mining gangs and local protests. In recent weeks, attacks on mining convoys and processing plants have surged, with armed groups seizing equipment and demanding ‘protection payments’. The government has deployed troops to the southern regions where most deposits are located, but the situation remains precarious. ‘We are seeing a perfect storm of criminality and political uncertainty,’ Sir Mark told the Financial Times. ‘Any prolonged unrest could cripple output just as global demand for lithium is exploding.’
The UK is heavily reliant on Peruvian lithium for its electric vehicle battery supply chains. British companies including Johnson Matthey and Britishvolt have invested millions in refining capacity that depends on raw material from the Andean nation. A disruption would ripple through the UK’s net-zero ambitions, which hinge on a rapid transition to electric mobility. Trade officials are now contingency planning, exploring alternative suppliers in Australia and Chile.
Election day itself is expected to be fraught. Fujimori, the daughter of former authoritarian leader Alberto Fujimori, has pledged a tough-on-crime approach, while Castillo has promised to renegotiate mining contracts and increase state control over resource extraction. Both candidates have faced assassination threats, and security forces have been placed on high alert. The run-off comes after a first round marred by allegations of fraud and voter intimidation.
The insecurity has also spooked investors. The Lima stock exchange has fallen for three consecutive weeks, and the sol has weakened against the dollar. ‘The digital sovereignty of Peruvian data is also at risk,’ warns Julian Vane, a technology and innovation lead who tracks the intersection of politics and tech. ‘Criminal groups are using encrypted messaging apps and cryptocurrency to coordinate attacks. The state’s inability to secure its networks creates a vulnerability that exposes the entire lithium supply chain.’
For the average Peruvian citizen, the crisis means higher electricity costs and potential blackouts. Lithium is used not only in car batteries but also in grid-scale storage for renewable energy. As demand surges amid the global shift away from fossil fuels, any supply disruption will hit household budgets. The poorest Peruvians, many of whom live near mining areas, are caught between gang violence and environmental degradation.
The UK’s approach has been to maintain a soft diplomacy: offering technical assistance for digital security and law enforcement, while avoiding public criticism of either candidate. But with polls indicating a nail-biter result, the window for intervention is closing. ‘We need a stable partner in Lima,’ says Sir Mark. ‘Lithium is too strategic to be left to chance.’
As Peruvians go to the polls, the world watches not just for the outcome but for the aftermath. The Black Mirror scenario Vane fears is one where algorithms predict criminal activity, but instead of preventing violence, they simply optimise routes for theft. ‘Technology is neutral,’ he says, ‘but in the wrong hands, it can accelerate insecurity.’ The question is whether Peru’s next leader can reclaim digital sovereignty and restore the rule of law before the lithium boom becomes a bust.
