Paul's Notes #9
Political Risk Update: New Wolves, New Sheep?
2026 has been volatile on the global political front, with many twists and turns, which have sent reverberations through the global economy and natural resource sector. Without doubt, geopolitics will be a central theme at the annual 2026 Rule Investment Symposium in Boca Raton, Florida (July 6-10). There is still time to register for Livestream access, which I will be hosting. Click the following link to register:
Register for the Rule Symposium 2026
The Iran Conflict sent oil and other markets into a frenzy. Now that the conflict seems to be settling down, many expect things such as fuel prices to return to normal, that is, the state they were before the conflict began in early March. Energy analysts think this will take time to achieve, if it is achievable, as there are still wrinkles to iron out, such as whether shipping through the Strait of Hormuz will pay a transit toll to Iran and Oman. Several of the keynote speakers will undoubtedly address the changing geopolitical climate, including three standouts:
Grant Williams, Author & Publisher, Things that Make You Go Hmmm
Dr Nomi Prins, Geo-Political Macro Economist, Author, Prinsights Global
Keith Hill, Non-Executive Chair, NG Energy International
I will be speaking with each of these to generate additional content and insight for the Livestream audience, although it will be a case of so many quesitons; so little time.
While the Iran Conflict has dominated headlines, other changes in the geopolitical environment affecting the natural resource sector, specifically presidential elections in Latin America, have received less attention. Many of the companies participating in the 2026 Rule Symposium have projects in Latin America, making this a pertinent concern for them. This edition of Paul’s Notes will thus provide a brief update of RIN #11 published in January 2026, the Who the wolf, who the sheep in Latin America? Since this was published, there have been a couple of very close presidential elections in Peru and Colombia, and a bit of a meltdown in Bolivia.
The headline news continues to be a swing from the Left to the Right in the presidential palaces across the continent, but as political analysts in the region point out, many of the elections are being decided by a hair’s breadth, which means that about half the voting population voted AGAINST whatever the winner was standing for, and candidates on the more extreme ends of the political spectrum underlining continuing polarisation.
Let’s look at the two most recent examples.
Keiko Fujimori is Peru’s president-elect, representing a return to the Right after a decade of Leftist presidents. Fujimori’s margin of victory was so slim that her victory was not established until a few weeks after the election, as every last international, mail-in and Andean highland vote was counted. Fujimori beat Roberto Sánchez with a 0.25% margin, which is not much of a mandate, especially considering that Fujimori and Sánchez together only took about 30% of the first round vote. At best, it could be argued that Fujimori represents 15% of the voting population.
Fujimori’s Fuerza Popular party holds 41 of 130 lower-house seats and 22 of 60 seats in the new Senate, which means she will initially enjoy Congressional backing and may be able to advance her agenda while remaining within the bounds of democratic institutions. Other presidents in the region lack this advantage and, without significant Congressional support, become frustrated by the checks and balances that democratic institutions impose and resort to ruling by decree. Colombia’s president, Gustavo Petro, is a recent example.
Fujimori should be positive for the natural resource sector, with a pro-mining agenda like her father and former President, Alberto Fujimori (1990-2000). She is keen to execute Peru’s estimated US$63B project pipeline to boost the economy. Mining already generates about 60% of Peru’s exports and about 10% of its GDP, and many of the projects in the development pipeline are for copper, which the world increasingly needs.
There are other aspects of her father’s history that Keiko presumably does not want to repeat. Alberto Fujimori began the disintegration of the traditional party system in Peru and ushered in an age of populist politics, before he was removed from office. He set the tone for Peru’s modern presidential era, which has seen eight presidents since Ollanta Humala completed his term of office in 2016, none of whom completed a full term.
The wrinkle for Keiko could be that razor-thin victory margin, as Sánchez had a very different vision for the natural resource sector, including partial nationalisation, changes to the concession system, higher taxes, and phasing out open-pit operations, which are the backbone of the country’s copper sector. Again, it can be argued that Sánchez perhaps only represents about 15% of the electorate, but much of that base is in the Andean highlands, where the minerals are. How Fujimori handles those relationships in her eagerness to get projects moving will be key to progress, or repeated blockades, which is the reality Bolivia’s president, Jorge Paz, is now facing, which I will touch on later.
Fujimori aims to fast-track project approvals, which could be challenging given the lack of urgency in rural and indigenous decision-making mechanisms. However, a plan to redirect 40% of mining royalties to host communities would enable communities to see the benefits of project development, rather than the costs, which is their long-standing argument. But caveat emptor, investors! Here is Sebastian Perez-Ferreiro, mining practice co-director at AMI:
“International investors often misread Peru’s truncated presidential terms as cyclical political noise, but it’s actually a structural feature of the country’s hybrid constitutional design, in which a unicameral congress held the executive on a short leash through a “permanent moral incapacity” clause that became a routine impeachment tool. Mining executives who plan around the assumption that an incoming president sets a new framework have repeatedly discovered that no head of state has lasted long enough to set anything.”
Colombia
Colombia has also returned to the Right after four years of its first Left president, Gustavo Petro. Abelardo de la Espriella beat Ivan Cepeda by 0.96% in the run-off, which Cepeda initially refused to accept. de la Espriella almost blew his opportunity. He was the clear winner of the first round with a cushion of 673,000 votes, which shrank to about 251,000 in the runoff.
Colombia’s president-elect has intentions similar to those of his counterpart in Peru, and a defeated opponent with equally contrary aims. de la Espriella wants to reactivate the oil and mining sectors to boost Colombia’s ailing economy and generate more royalties to fund social investment; Cepada wanted to further curtail what he perceived as resource extractivism, a continuation of the stated policy of incumbent Gustavo Petro. The caveat here is that while Petro’s discourse has been against extractivism, particularly oil and thermal coal, his administration has given permits to projects, including an open pit copper mine, and has been kept afloat by natural resource royalties. Cepada will take a seat in the Senate and will likely be a strong opponent to the incoming government. Building consensus will be a key task for de la Espriella in Congress, who lacks majorities in either house. He may be able to initially generate support from a Congress that will be relieved that the constant battles with Petro over absolutely everything are over, but building consensus, respecting institutions, and the Constitution will be key to that lasting beyond a honeymoon period. Time will tell whether the businessman and lawyer will have the patience for that.
Bolivia
I will close this edition with a reflection on the situation in Bolivia as it is pertinent to other regions of Latin America, albeit with differences. When Rodrigo Paz was elected in October 2025, it was a marked shift to the Right after 20 years of the Left. The runoff was between a Right-wing candidate and a further Right-wing candidate. As noted in RIN #11, presidents in Bolivia enjoy a very brief honeymoon period, and that has certainly been the case for Paz. Whilst he wants to advance the natural sector, political fires are raging all around him, which pushes any reset further into the future. His predecessor, Luis Arce, although of the MAS party that was voted out in October 2025, also wanted to reset the mining sector to help solve Bolivia’s economic woes, but he never got the chance, as there were always more pressing things to deal with, and promoting mining is seldom a vote-winner.
In June 2026, Paz declared a state of emergency and deployed the military to disperse anti-government protests and clear roadblocks, an oft-used tactic by farmers and Indigenous groups that strangles the economy, resulting in shortages of fuel, food and medicine. Paz wants to liberalise the economy and pare back the culture of state handouts that helped sustain the MAS party in power for two decades.
I note this, as opposition groups in Peru and Colombia, particularly in rural areas, often adopt similar measures to press their concerns to the government and secure concessions. With polarised electorates and rural communities who are highly sensitised to the impacts of natural resource extraction in both countries, the next four years, whilst holding a lot of promise, could also face meaningful challenges.
