Exploring cost pressures, ESG, and the gaps in mining studies.
Costmine Intelligence’s Michael Sinden, Managing Director, and Gordon Sobering, Director of Costing and Engineering, recently joined Brian Leni on Mining Stock Education to share their perspectives on mining costs, project valuation, and the risks investors should be aware of when evaluating technical studies.
During the conversation, they discussed how cost inflation has reshaped the mining sector in recent years. Pandemic-driven pressures pushed up costs across labor, equipment, and consumables, with labor remaining the most persistent challenge. While some fuel- and material-linked costs have stabilized, wage pressures continue to rise as new collective agreements are reached across the industry.
Sinden and Sobering also explored the growing influence of ESG on project evaluation. The shift toward alternative energy and electric mining fleets is already shaping capital and operating costs, and Costmine Intelligence has expanded its datasets to include battery-electric equipment and carbon emissions tracking. This allows engineers, consultants, and investors to model trade-offs between conventional and lower-carbon options more effectively.
A recurring theme in the discussion was the gap between assumptions in technical studies and the realities of project execution. Preliminary Economic Assessments (PEAs), in particular, often underestimate ramp-up timelines, omit reclamation estimates, or present overly optimistic operating costs. Independent data and models, such as those provided through Costmine’s Sherpa tools, help fill this gap by offering more rigorous, reality-tested benchmarks.
Jurisdictional considerations were another key topic. While the base costs of labor and equipment can be applied internationally, factors such as shipping, tariffs, and infrastructure play a significant role in shaping project economics. At the same time, investor demand remains concentrated on gold, copper, and high-grade iron ore, with resilience also seen in metallurgical coal and uranium.
Looking ahead, Sinden noted the importance of mining-specific cost indices over general inflation measures like CPI, as well as the need to better understand labor and steel as drivers of future cost escalation. The discussion also highlighted WOODY, Costmine Intelligence’s forthcoming platform that integrates property databases with cost models to deliver independent, real-time cost curves for mining projects worldwide.
As Sobering summarized, independent cost analysis provides not only numbers but also a “checklist” approach to ensure critical assumptions are not overlooked. From ramp-up periods to reclamation planning, rigorous data remains essential to evaluating projects realistically.
Independent cost analysis remains vital in a sector where assumptions can make or break a project. By grounding valuations in real data, Costmine Intelligence helps ensure investors and operators alike have a clearer view of the risks and opportunities shaping today’s mining industry.
