Hidden Risk: Energy Resilience Matters in Gold Mining Stocks
The gold mining industry is experiencing record margins due to higher gold prices, but this may be obscuring a risk that conventional cost reporting does not fully capture.
Two producers can report similar all-in sustaining costs while carrying very different exposure to diesel and vulnerable supply routes. One mine may run on contracted hydropower, while another depends on heavy fuel oil shipped through a distant port.
The World Gold Council's latest industry-wide data show that average all-in sustaining costs rose 16% year over year to $1,785 an ounce in the first quarter of 2026. A stronger gold price lifted average AISC margins to a record $3,076 an ounce.
Energy resilience may be an underpriced attribute in gold-mining equities, as identical AISC can hide very different levels of risk. The Strait of Hormuz's disruption has made it more consequential than a brief oil-price spike, and mines that require less diesel per tonne will not be immune to disruptions.