Supporters of leftist schoolteacher Pedro Castillo celebrate in downtown Lima following the official proclamation of him as Peru's president-elect on Monday. Photo: AFP

Peru's President Pedro Castillo swore in Mirtha Vasquez, a left-wing former head of Congress, as prime minister on Wednesday, replacing her predecessor who resigned after two months in the job, as the administration grapples with political instability.

The move keeps Castillo, a member of a Marxist-Leninist party, on the left of the political spectrum. But it moderates his cabinet overall. Castillo kept center-left Economy Minister Pedro Francke in the role, and named a new energy and mines minister, Eduardo Gonzalez Toro.

Mining is a key industry for Peru, which is the world's second-biggest copper producer after neighboring Chile. Castillo has said he wants to increase tax revenue from the sector to fund social programs. Former prime minister Guido Bellido was little-known before taking the role, but his brash style rattled the opposition-led Congress as investors fretted about the leftist administration.

Vasquez, the new prime minister, served as head of Congress between 2020 and 2021. She is a lawyer and defended Maxima Acuna, a peasant farmer, in a prominent case against Newmont Mining Corp's Yanacocha gold mine that drew headlines around the world.

Bellido tweeted after the announcement of his resignation that he would fight back and posted a picture of fighting from the movie Gladiator, a hint at challenges to Castillo ahead.

Like Castillo, Bellido is a member of the Marxist-Leninist Free Peru party, although he was seen as particularly far-left compared with the more pragmatic Castillo. Vasquez is not a member of Free Peru and belongs to the left-wing Broad Front, which has made environmental concerns a key issue. Bellido said he would put the entire cabinet up for a confidence vote if Congress tried to censure Maravi.