SEATTLE (Scrap Monster): The costs in gold mining industry continued to surge in second quarter of 2022. The average all-in sustaining cost (AISC) touched a new peak of $1,289 per Oz during the quarter. This is significantly higher by 4% over the prior quarter and even higher by 18% when compared with the corresponding quarter a year before, Metals Focus data suggested.
According to Adam Webb, Director of Mine Supply, Metals Focus, the AISC has recorded sequential rise in almost every quarter since Q2 2020. Since then, the AISC has increased by almost one-third. The surge in costs were mainly driven by inflation of input costs, lower grades of production, along with high gold prices incentivizing higher cost.
Several input costs such as labour, fuel, electricity and consumables have been on the rise, largely due to Covid-19 pandemic and supply chain disruptions. However, energy prices turned out to be the most significant driver of cost inflation during last quarter, triggered by the Russian invasion of Ukraine.
The escalated energy prices have prompted many gold producers across the world to raise the cost guidance for the current year.
Looking ahead, Metals Focus expects input costs to remain at relatively higher levels. However, a more stable oil and gas prices and the pressure on highest cost gold producers to cut costs could limit further increase in costs.
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