Diesel price surge putting mining profits to test

AI desk brief

Soaring diesel prices and Strait of Hormuz-related fuel disruption are lifting mining operating costs, with the impact splitting producers between those that can offset energy inflation through by-products or stronger metal prices and those that cannot. Barrick said gold production costs rose 17% between 2025 and 2026, yet Q2 2026 attributable adjusted EBITDA still climbed 51% year-on-year to $2.55bn thanks to record bullion prices; Newmont estimated every $10/bbl rise in oil adds about $110m, or $21/oz, to costs.

Copper names are also feeling the squeeze: Antofagasta lifted full-year cash cost guidance to $2.60-$2.70/lb from $2.40-$2.60/lb on higher diesel, while Capstone reported Q2 C1 cash costs up 15% y/y to $2.82/lb, with Mantos Blancos C1 costs up 88% to $3.93/lb. Ivanhoe said an 18c/lb diesel increase at Kamoa-Kakula was largely absorbed by stronger copper prices and smelter economics, underscoring that prolonged fuel inflation could pressure margins if metals prices keep easing.