World’s No. 2 Gold Miner Says Diesel Risks Driving Up 2027 Costs
(Bloomberg) -- Agnico Eagle Mines Ltd. warned that rising diesel prices risk raising the cost of producing gold by as much as $80 per ounce next year, signaling mounting inflationary pressures for the mining industry.
The world’s second-biggest gold producer expects elevated diesel prices to add about $50 to $60 an ounce to its costs in the fourth quarter, up from roughly $30 an ounce in the prior period, Chief Financial Officer Jamie Porter said during a call with analysts Thursday. Miners rely heavily on the fuel to power trucks and other equipment.
Shares in the Canadian company fell as much as 4.5% in Toronto, alongside a broader selloff across the mining sector.
Mining companies are grappling with rising costs for labor and other key inputs. Prices for diesel, sulfur and sulfuric acid have climbed amid supply disruptions stemming from the conflict in the Middle East and reduced fuel flows through the Strait of Hormuz. At the same time, historically elevated metal prices, such as gold and copper, have helped cushion the impact for some miners.
Agnico is somewhat insulated because much of its production comes from mines in northern Ontario and Quebec that are connected to electricity grids powered largely by hydroelectric and nuclear generation, Porter said. Still, diesel accounts for about 11% of the miner’s operating costs.
“We don’t have any more insight into long-term diesel prices in 2027 than anyone else,” Chief Executive Officer Ammar Al-Joundi said on the call, adding that the company had hedged some of its fuel needs.
Toronto-based Agnico is also facing higher costs as the US and Canada continue to quarrel over tariffs. The company incorporated an estimated impact of about $5 an ounce into its latest cost guidance, released Wednesday. Porter warned that the burden could grow next year if trade tensions persist.
“If there isn’t a trade deal, we’d actually expect that impact to increase in 2027,” he said.
The company’s all-in sustaining costs rose to $1,648 an ounce in the third quarter, and it now expects the measure to finish 2026 near the upper end of its $1,400-to-$1,550-an-ounce guidance range, according to the Wednesday report.
More stories like this are available on bloomberg.com
©2026 Bloomberg L.P.
Get Latest real-time updates
Catch all the Business News , Corporate news , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More✕
Wait for it…
Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.