220 NATURAL GAS AND MINING IN PERU A Balanced Energy Transition Strategy Luis Miguel Castilla & Carlos Gomero* Abstract The global energy transition is simultaneously reshaping electricity systems and elevating the strategic importance of mining as a supplier of critical minerals. For Peru, this creates a dual challenge: expanding mineral production to meet surging global demand while reducing emissions without sacrificing the cost competitiveness that makes its mining sector viable. This paper examines the role of natural gas as a system enabler in the decarbonization of Peru’s mining sector. It argues that a purely renewable-based approach faces binding constraints related to intermittency, system costs, and infrastructure readiness —particularly in continuous, energyintensive operations that cannot tolerate supply interruptions. Drawing on international evidence, system-level analysis, and quantified scenario comparisons, the paper shows that natural gas provides the firm, dispatchable, and flexible capacity that supports renewable integration, stabilizes electricity costs, and ensures operational continuity. In Peru, domestic gas resources —especially from the Camisea gas fields— offer a structural advantage by reducing reliance on imported fuels and enabling hybrid energy solutions. The paper concludes that, for Peru, a balanced strategy combining renewable expansion with reliable gas-based generation — supported by robust infrastructure investment in both transmission and transportation, explicit transition sequencing, and credible measurement systems — is the most practical path to a mining energy transition that is both competitive and low-emission. This advantage depends on sustained investment in the full gas value chain and a clear strategy to maintain an energy matrix that balances competitiveness, sustainability, and security as greener alternatives mature. * Videnza Instituto and LQG, respectively. The authors wish to thank Nicolás Besich, Daniela Santander, Leonardo Escalante, Juan José Collantes and Juliana Mosqueira for their valuable assistance in the publication process of this policy paper. The authors are solely responsible for the content, analysis, and conclusions expressed herein.
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