Agnico Eagle Mines Ltd. warned that rising diesel prices could lift gold production costs by up to $80 per ounce next year, underscoring inflationary pressure on the mining sector. Chief Financial Officer Jamie Porter said elevated diesel prices are expected to add about $50 to $60 an ounce to costs in the fourth quarter, up from roughly $30 an ounce previously. Miners depend heavily on diesel to power trucks and equipment, while prices for diesel, sulfur and sulfuric acid have climbed amid supply disruptions tied to the Middle East conflict and reduced flows through the Strait of Hormuz.
Despite these pressures, Agnico remains somewhat shielded since much of its output comes from northern Ontario and Quebec mines connected to electricity grids powered largely by hydroelectric and nuclear generation, Porter noted. Diesel still accounts for about 11% of the miner’s operating costs. Ammar Al-Joundi, the company’s chief executive officer, said Agnico has hedged some fuel needs but cautioned that long-term diesel prices remain uncertain.
Toronto-based Agnico is also facing higher costs from ongoing US-Canada tariff disputes, incorporating an estimated $5 per ounce impact into its latest cost guidance. Porter warned the burden could grow in 2027 if trade tensions persist. The company’s all-in sustaining costs rose to $1,648 an ounce in the third quarter, with 2026 guidance now near the upper end of the $1,400-to-$1,550-an-ounce range.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing