A partial closure of the Strait of Hormuz on 28 February pushed Brent crude into triple digits and, together with China’s May 1 restriction on sulphuric acid exports, has squeezed supplies of diesel and processing chemicals miners rely on. The disruption raised shipping and insurance costs, pushing diesel prices higher, while the export curbs cut a major route for copper‑processing reagents — driving up input costs and increasing the risk of project delays.

How the conflict hit fuel and logistics

  • The 28 February escalation included a partial blockade of the Strait of Hormuz, a chokepoint that normally carries about a fifth of daily oil flows, contributing to a global supply shock.
  • Disruption and higher maritime risk pushed Brent crude into triple digits in early March, raising diesel costs that directly affect haul trucks, pumps and standby generators at mines.
  • Rising freight and insurance premiums compound the impact of higher fuel, and because mining is electricity‑ and transport‑intensive, these cost increases quickly erode operating margins and can force cuts to capital expenditure.

Sulphuric acid: the overlooked choke point

  • Sulphuric acid, widely used to leach copper from oxide ore and to make phosphate fertiliser, has become scarce after China moved to restrict outbound shipments produced as a smelting by‑product (ban effective 1 May 2026).
  • China has been a major exporter of sulphuric acid; Chile and other Latin American refiners that import Chinese acid are particularly exposed because many oxide leaching circuits depend on those shipments.
  • Market reports and industry analysts say spot prices for sulphuric acid have risen, creating the risk that miners unable to secure reagents will reduce throughput or deploy costly workarounds.

Practical effects on copper and other metals

  • A substantial share of global copper output depends on sulphuric acid for oxide ore processing, so reagent shortages could curtail production if alternatives or logistics solutions are not found.
  • Higher oil and reagent costs raise cash costs for operations; analysts note that sustained price spikes typically translate into several‑percent increases in overall operating costs and pressure on margins already hit by inflation.
  • Potential responses by miners include reduced throughput, delayed projects, and cuts to planned capital expenditure—measures that would affect supply and pricing across related industries.

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Analysts say rising diesel and sulphuric acid prices threaten to push up operating costs, force cuts to throughput and delay projects, reducing output across the mining sector.

This article was created with AI assistance.