Soaring diesel prices are putting mining profits under pressure, as rising production and transportation costs ripple through the industry. Disruptions in the Strait of Hormuz have exacerbated the issue, driving up global energy prices and squeezing margins for miners. Copper producers like Antofagasta and Capstone Copper have reported higher operating expenses, while gold miners such as Barrick Mining and Kinross Gold have relied on stronger bullion prices to cushion the blow.
Barrick’s gold production cost surged 17% between 2025 and 2026 due to higher fuel costs, yet the company still managed to boost its attributable adjusted EBITDA by 51% year-on-year to $2.55 billion in Q2 2026. Similarly, Ivanhoe Mines saw an 18¢/lb increase in diesel costs but offset this with stronger copper prices and smelter economics, generating $385 million in Q2 EBITDA.
The contrasting results highlight a growing divide between miners with diversified revenue streams and those more exposed to energy costs. TD Cowen analysts warned in March 2026 that surging energy prices could impact historic margin expansions, estimating a 15% increase in AISC year-on-year. With metals prices starting to fall, the industry may need to brace for further challenges.
Gold producers have faced similar pressures, though record bullion prices have provided greater protection. Kinross reported a 25% increase in production costs due to higher fuel costs, yet its margin still increased by 42% in Q2 2026. The World Gold Council noted that while diesel prices increased 54% in the US and nearly doubled in Australia, record gold prices generated unprecedented margins and cash flows in Q1 2026.