Diesel Price Surge Tests Mining Profits Globally

Soaring diesel prices have started to impact the mining sector, driving up production and transportation costs while influencing global metal pricing as the commodity market adjusts to inflation and trade tariffs. Disruptions in the Strait of Hormuz have restricted energy shipments, pushing fuel costs higher worldwide.

Impact on Copper and Gold Producers

According to Mining.com, copper producers such as Antofagasta and Capstone Copper reported rising operating expenses. Antofagasta increased its full-year cash cost guidance almost $0.3 to between $2.60 and $2.70 per pound, citing higher global diesel prices. Capstone reported a 15% year-on-year increase in second-quarter C1 cash costs to $2.82 per pound, with its Mantos Blancos mine seeing costs surge 88% to $3.93 per pound due largely to diesel and sulphuric acid expenses.

Gold producers faced similar pressures, although record bullion prices provided protection against rising operating expenses. Barrick Mining reported a 17% rise in production costs between 2025 and 2026 due partly to fuel, but lifted attributable adjusted EBITDA 51% year-on-year to $2.55 billion in the second quarter of 2026. Kinross Gold reported a 25% increase in production cost of sales to $1,352 per ounce, while its margin increased 42% to $3,131.

Regional Disparities and Industry Response

Data from the World Gold Council indicated that diesel prices increased 54% in the United States and nearly doubled in Australia, leading some junior Australian operations to suspend activities. Larger mining companies absorbed the initial shock, but industry analysts warn of mounting pressures on cost guidance.

Key facts

• Barrick Mining production costs rose 17% between 2025 and 2026, driven in part by higher fuel costs.
• Antofagasta raised its full-year cash cost guidance to between $2.60 and $2.70 per pound.
• Capstone Copper reported a 15% year-on-year rise in second-quarter C1 cash costs to $2.82 per pound.
• Kinross Gold saw production cost of sales increase 25% to $1,352 per ounce in the second quarter of 2026.
• World Gold Council data showed diesel prices increased 54% in the US and nearly doubled in Australia.