The Rising Cost of Mining Gold

It’s not just the price of gold that’s rising. The cost of mining gold is also climbing, though at a far slower pace than the precious metal’s price.

All-in sustaining costs (AISC) rose an average of 3.3 percent for the world’s leading gold miners to $1,345 an ounce during the final quarter of 2023, according to S&P Global. Labor expenses rose, as did the cost of equipment and supplies necessary for mining. Companies operating in high risk areas are also seeing an increase in their security costs.

North America is the most expensive continent for gold mining where the AISC is $1,522 an ounce. After suffering a long strike at its large Peñasquito mine in Mexico, Newmont, the world’s largest gold mining company, has seen a substantial increase in its cost of labor.

South America is a less expensive environment for precious metals miners, with an AISC of $1,372 an ounce. Australia and other Pacific nations had an AISC of $1,132 an ounce.

A new factor that is contributing to rising costs, at least in the short term, is the effort by goldminers to reduce the environmental impact of their work. Barrick Gold, for example, is investing in a solar energy plant and battery storage facility at one of its largest mines. Miners are also electrifying their vehicle fleets to reduce pollution, heat, and noise.