Accra:Soaring diesel prices are beginning to impact the mining industry, leading to increased production and transportation costs and affecting the global pricing of metals as the commodity market responds to tariffs and inflation.
According to Ghana Web, disruptions in the Strait of Hormuz have affected the transportation of liquefied natural gas (LNG) and other energy shipments, driving up prices worldwide. The mining sector is particularly impacted as fuel is crucial for powering production and transporting metals from mine sites to international markets.
Copper producers such as Antofagasta and Capstone Copper have reported rising operating expenses. Similarly, gold miners like Barrick Mining, Kinross Gold, and Monument Mining are relying on stronger bullion prices to maintain their profit margins. Barrick’s gold production costs surged by 17% between 2025 and 2026, largely due to increased fuel expenses. Despite this, record high gold prices enabled the company to boost its attributable adjusted EBITDA by 51% year-on-year to $2.55 billion in Q2 2026.
Ivanhoe Mines experienced a comparable situation; even with an increase of 18 cents per pound in diesel costs, its Kamoa-Kakula copper mine achieved $385 million of Q2 EBITDA, aided by stronger copper prices and favorable smelter economics. Ivanhoe Mines founder and co-chairman Robert Friedland stated that elevated global diesel prices had been well managed, with the Kamoa-Kakula smelter offering a natural hedge amid constrained flows through the Strait of Hormuz.
The situation underscores a growing divide between miners who can offset higher fuel expenses with commodity-price gains or valuable by-products, and those more vulnerable to energy costs. Analysts from TD Cowen warned in March 2026 that escalating energy prices might threaten historic margin expansions, adding pressure to cost guidance similar to the impacts observed in 2022 during the Russia-Ukraine conflict. They projected a 15% year-on-year increase in all-in sustaining costs (AISC) and a 22% rise in all-in costs.
As interest rates rise and supply concerns ease, metal prices are beginning to decline, suggesting the industry may need to prepare for further challenges. Antofagasta has adjusted its full-year copper cash cost guidance upward by almost $0.30 to between $2.60 and $2.70 per pound, from a previous range of $2.40 to $2.60, attributing this to higher global diesel prices.