Seventeen protesters were killed on Monday in the southern province of Puno in the worst day of violence since Castillo's Dec. 7 dramatic removal, which has seen a total of 39 people killed in protests and seven more in related accidents.
The anger in the Andean south looks likely to harden, protest leaders told Reuters, a major risk to firms in the world's no. 2 copper producer, home to large mines including MMG Ltd's Las Bambas and Freeport-McMoRan's Cerro Verde.
"This is an endless battle," said Edgar Chura, leader of the Puno Defense Front protest group before the Monday clashes, a view shared by other protest leaders who spoke with Reuters.
He said a key demand of the southern regions was overhauling the current market-friendly constitution dating back to conservative President Alberto Fujimori in the 1990s, which he called "an enemy of the people economically and politically".
The protests, sparked by Castillo's removal and arrest after he illegally tried to shutter Congress to avoid an impeachment vote, have focused anger on new President Dina Boluarte and the widely reviled legislature seen as corrupt and self serving.
Protesters want new elections this year, a clear-out of Congress and a new constitution. Boluarte, Peru's first female president who was Castillo's deputy, has tried to appease the protesters, offering elections two years early in early 2024. But she says many of their demands cannot be met.
Boluarte, who speaks the indigenous Andean language Quechua as well as Spanish and comes from a small town, had appeared to get something of a grip on the situation as protests cooled in recent weeks, partly due to the festive season.
But with the new explosion of violence, her administration is now under renewed pressure, caught between a hostile Congress and angry rural voters who felt Castillo, though flawed, was their representative against the traditional political elite as a former teacher and son of peasant farmers.
"In the south he always had support and approval, so there is a sector that genuinely feels that they have removed the politician who represented them," said Jeffrey Radzinsky, director of political consultancy Grupo Fides Peru.
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Peru's south, a poor area flush with copper, had been key in driving Castillo's unexpected rise into office in 2021, when Boluarte had been his vice presidential runner.
Castillo won support pledging to reform the constitution to spread more of the country's copper wealth and empower marginalized indigenous groups. But he largely failed amid accusations of corruption, protests and revolving Cabinets of over 80 ministers in just 17 months.
His arrest though has galvanized his support base and smudged over his shortcomings, firing up popular anger against the political elite many blame for wide inequality between wealthy coastal capital Lima and the inland provinces.
"The Peruvian people don't want this Congress. We don't want newly appointed president Dina Boluarte," said protester Antonio Choque at a recent demonstration in the southern region of Ica
who blamed conservatives for ousting Castillo.
"We want her immediate resignation, the closure of Congress and a new constitution."
Boluarte has a low popularity rating of 21% - similar to Castillo before his ouster - though Congress is ever lower, with support of just 13%, according to a recent poll by Ipsos Peru.
Prime Minister Alberto Otarola says the protests are being driven by "dark money" and foreign interests seeking to destabilize Peru. He said 75 police were injured in the Monday clashes and pledged new security measures to restore order.
Protest leaders, meanwhile, say that a government proposal to bring elections forward to April 2024 is not enough.
Jose Luis Chapa, a protest leader and workers union official in Arequipa, said new elections must be held this year if the government wanted dialogue.
"The agreement is not to talk with anyone from government, least of all Dina Boluarte," the mining region protest leader said, adding protests would be "staggered" around the south. Others are planning potential marches to capital Lima.
In Ayacucho, hit by the worst violence in December, Rocío Leandro, leader of the Ayacucho Defense Front protest group, said anger at the government had been sharpened by the protest deaths and called on Boluarte to step down to allow a transitional government.
"We have no fear, despite the fact that they bring lethal weapons that have ended the lives of our brothers. We are organizing ourselves and we will keep going," he said.
(Reporting by Marco Aquino; Editing by Adam Jourdan and Alistair Bell)
By Marco Aquino
