Oil shock could push mining costs sharply higher: BMO

Rising oil prices linked to current tensions in the Middle East could significantly raise mining costs and pressure sector margins, according to a new BMO Capital Markets report.

Examining historical cost trends using Wood Mackenzie data, analysts found mining expenses rise sharply with crude prices, though exposure varies by commodity. Iron ore operations are the most sensitive, with costs increasing about 4.2% for every 10% rise in oil prices, compared with roughly 3.5% for copper and about 2% for gold.