Diesel price surge putting mining profits to test

Soaring diesel prices have started to impact mining, rising production and transportation costs and influencing the pricing of metals around the globe, as the commodity market adjusts to tariffs and inflation.

Disruptions in the Strait of Hormuz have affected the transportation of liquefied natural gas (LNG) and other energy shipments, raising prices globally. The mining industry is impacted by this as fuel is essential to power up production and transport metals from the mine site to global markets.

Copper producers Antofagasta (LON: ANTO) and Capstone Copper (TSX: CS) have reported rising operating expenses, while gold miners Barrick Mining (NYSE: B) (TSX: ABX), Kinross Gold (TSX: K; NYSE: KGC) and Monument Mining (TSX-V: MMY) have relied on stronger bullion prices to protect margins.

Barrick’s gold production cost rose 17% between 2025 and 2026 in part because of higher fuel costs. With gold reaching record high prices, the company was still able to lift attributable adjusted EBITDA 51% year-on-year to $2.55 billion in Q2 2026.

A similar phenomenon affected Ivanhoe Mines, as even with an 18¢/lb equivalent diesel cost increase, its Kamoa-Kakula copper mine generated $385 million of Q2 EBITDA, helped by stronger copper prices and smelter economics.

“Despite elevated global diesel prices during the quarter, the impact on our operating costs has been well contained,” Ivanhoes Mines founder and co-chairman Robert Friedland said in the 2026 Q2 results release. “Our world-class smelter at Kamoa-Kakula provides a natural hedge while flows through the Strait of Hormuz remain constrained.”

The results highlight a growing divide between miners with sufficient commodity-price gains or valuable by-products to absorb higher fuel bills and those more exposed to energy costs.

In March 2026, TD Cowen analysts warned that surging energy prices threatened to impact historic margin expansions, adding more pressures on cost guidance, similar to the impact seen in 2022 with the Russia-Ukraine invasion. They estimated that there would be a 15% increase in AISC year-on-year along with 22% higher all-in costs.

With interest rates rising and supply concerns easing, metals prices are also starting to fall and the industry might need to brace for impact.

Copper cost squeeze

Antofagasta increased its full-year copper cash cost guidance almost $0.3 to between $2.60 and $2.70 per pound, from $2.40 to $2.60, citing higher global diesel prices.