A deepening political crisis in Peru, triggered by disputed presidential election results, has placed billions of pounds of British mining investments at risk, with Downing Street now monitoring the situation closely. The standoff between left-wing populist candidate Ricardo Flores and conservative rival Maria Gutierrez has paralysed the country’s institutions, raising fears of asset freezes and contract renegotiations that could hit UK-listed mining giants such as Anglo American and Hochschild Mining.
Flores, who narrowly leads with 50.3 per cent of the vote, has made repeated threats to nationalise key mining operations and tear up existing contracts if he assumes office. His rival Gutierrez has refused to concede, citing widespread irregularities and calling on the military to intervene. Protests in Lima and the mining regions of Cajamarca and Arequipa have turned violent, with at least 12 dead and hundreds injured.
For the United Kingdom, the stakes are unusually high. Peru is the world’s second largest copper producer, a metal critical for the global transition to electric vehicles and renewable energy. British companies have invested approximately £7 billion in Peruvian mining projects over the past decade, including the massive Quellaveco copper mine in Moquegua, a joint venture between Anglo American and Mitsubishi. The project, which became operational in 2022, represents one of the largest single British investments in Latin America.
Downing Street confirmed on Sunday that officials from the Foreign Office and the Department for Business and Trade are in daily contact with the Peruvian government and UK firms. A government spokesperson said: “We are closely following developments in Peru and urge all parties to respect the democratic process and the rule of law. British businesses operating in Peru should be able to do so without threat of arbitrary state intervention.”
The crisis is unfolding against a backdrop of regional instability. Peru has had six presidents in five years, a cycle of dysfunction that has eroded investor confidence. The current electoral impasse is reminiscent of the 2021 standoff between Pedro Castillo and Keiko Fujimori, which caused months of uncertainty and a sharp drop in foreign direct investment.
Analysts warn that a Flores victory could trigger an exodus of capital. “Flores’s rhetoric is deeply hostile to foreign mining interests,” said Dr Helena Cross, a Peru specialist at Chatham House. “His party has explicitly called for a new constitution that would prioritise state control over natural resources. That would be a game-changing risk for UK firms.”
However, Gutierrez’s path to power is equally fraught. Her refusal to accept the result has deepened the institutional crisis, with the electoral authority caught between accusations of bias and demands for a full recount. The Peruvian army has deployed troops to polling stations, but has so far resisted calls to impose a state of emergency.
The UK’s relationship with Peru is broader than mining. Bilateral trade exceeded £2 billion in 2023, and Peru is a signatory to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which Britain joined in 2022. Any disruption to Peruvian exports could ripple through those wider trade arrangements.
Some in the City of London are already hedging their bets. Share prices of Anglo American and Hochschild dropped by 3 per cent and 5 per cent respectively on Monday as investors priced in political risk. Hochschild, which operates two silver and gold mines in Peru, has been particularly vocal, warning that any renegotiation of its fiscal stability agreements would force it to reconsider its entire portfolio in the country.
The British embassy in Lima has been instructed to maintain an open dialogue with both camps. “This is not a time for public posturing,” said a senior diplomat. “We are making clear to all sides that the stability of Peru’s investment environment is essential for the country’s long-term prosperity and for the prosperity of its citizens.”
For now, the world waits. The final result may not be known for weeks, and Peru’s institutions are fragile. The UK’s immediate priority is to protect its commercial nationals and ensure that the rule of law prevails. But if chaos continues, the Foreign Office will have to consider more drastic measures, including travel warnings, sanctions on individuals who obstruct a peaceful transfer of power, or even a freeze of bilateral aid.
In the high stakes game of geopolitical influence, Britain’s soft power in Latin America is about to be put to the test.
