While rising inflation is affecting all aspects of mining operations, it is fuel and power costs that are rising the most, according to a survey of more than 100 miners conducted by GlobalData in August and September. When asked where they were seeing the greatest increase in mining operating costs at present, 88% selected fuel and power as one of the top three areas, followed by maintenance parts/repair (47% of respondents) and explosives (37%).
The increases being experienced in fuel and power costs were also substantial relative to the costs 12 months earlier. Some 89% of respondents have experienced fuel and power price increases of 11% or more, with 48% citing an increase of more than 30%. Meanwhile, price increases of over 30% were experienced by 29% of respondents when it came to explosives, which is to be expected given the rising cost of its raw materials. For other consumables and maintenance parts/repair, 28% of respondents had experienced price increases of 21% or more, while elsewhere increases were not so severe – the most common price increase for wear parts and tyres was 11%-20%, whilst for labour, it was 6%-10%.
Price increases have also encouraged miners to seek out new suppliers more than before. Overall, 30% strongly agreed and 45% agreed with the statement ‘We have looked for alternative suppliers more this year than before because of higher prices’, with 45% confirming they had specifically looked for a new supplier for fuel or power, with even higher shares of 70% for wear parts and 75% for other consumables, such as reagents and lubricants.