Inflation costs

Mining Industry Beware, Inflation Is Eroding Project Economics…Rapidly

Inflation is rampant across all industries and people are starting to feel the pinch. It is dramatically increasing the cost of living. 

As the industry that produces the materials of modern living, the mining industry is not immune from inflation, if anything it is the place to look for the costs coming down the pipeline. 

According to new data from Costmine analyst, Brad Terhune, costs are not only increasing but they have been accelerating over the past couple of years. It is getting more expensive to build and operate a mine.

Costs Are Rising and Accelerating

According to a recent Costmine analysis, there is an accelerating upward growth in capital costs in the second half 7-year window of the study.


The conveyor has seen the largest cost increases on a percentage basis over much of the 7-year time frame. It is eclipsed only by the locomotive in 2017 and by all pieces in 2020 due to it being the only item seeing a reduced cost that year.

The rising and accelerating capital costs are rapidly dating many mining economic studies for development projects while operating costs are throwing another wrench into estimates.

Do Your Estimates Early and Do Them Often

Cost estimators in the mining industry know that costs escalate over time and that it is best to avoid delays in development decisions. The costs for developing a project today are substantially higher than it would have been just three to four years ago.  

According to data from Mining Intelligence there were 332 technical documents filed over the same 7-year period of the Costmine study. The question one would ask is do these technical documents include and account for the rapid rate of inflation?

A mining project financed years ago may need to relook at their economics while investors reconsider their portfolio. With an already looming supply gap for several key critical metals and minerals, the cost of the energy transition just increased.

Costmine works every day to capture the latest in mining costs with an extensive network built over years. If you are interested in the latest in cost estimate data, fill out the form below.

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