In a move that may ease investors concerns, Peru’s President-elect Ollanta Humala formally named Luis Miguel Castilla as Finance Minister and also announced that Central Bank President Julio Velarde would remain in his post. He first made the announcement of Castilla’s appointment on June 20th via Twitter and it was later confirmed by his Ganu Peru party in an official email today.
Humala, the controversial former army officer that sent Peru’s financial markets into turmoil, takes office on July 28th. These appointments are seen by many as an effort to reassure investors that any plans the new administration may have to raise taxes, increase mining royalties or enlarge state control will not erode economic growth.
Castilla, who served as departing President Alan Garcia’s Deputy Finance Minister, is considered to be a fiscal moderate and holds a doctoral and master’s degrees from Johns Hopkins University. Castilla is a former consultant to the World Bank and wrote a chapter on Latin America and East Asia trade strategies in a 2008 book entitled “Growth and Development in Emerging Market Economies.” Patricia Teullet, general manager of the Peruvian Exporters’ Association and a critic of Humala stated that naming Castilla is a “magnificent” sign that Humala has heard investors’ concerns.
Humala also appointed Carlos Herrera Descalzi as Peru’s Energy and Mining Minister. Descalzi most recently served as Dean of the College of Engineers. In a recent interview with Peru21 the newly appointed minister said he had already spoken with a number of mining companies and members of the National Mining and Petroleum Society who were willing to negotiate a “windfall tax” on their profits. He stated that the purpose is to meet the needs of the population and to reduce social conflicts, which have been growing faster than Peru’s booming economy. Descalzi also said, “It is a crucial issue, because the population is convinced that mining can contribute more to Peru.”
Ollanta Humala’s path to President-elect of Peru hit Peruvian mining stocks hard. As Peruvians went to the polls MiningFeeds.com looked at 10 Canadian listed mining stocks, which, on average, were already down 18.9 percent prior to his victory – CLICK HERE – for the article.