Record gold, rising costs: are miners keeping the windfall?

South Africa’s four biggest gold miners all received more than $4,000 an ounce in the September quarter. Their all-in sustaining costs rose between 17% and 26% on the year, according to FilingReader, which summarises company filings automatically. Its figures below are from those filings; we have not checked each one against the original reports.

Side by side

As reported by FilingReader on 9 November. Sibanye-Stillwater, the fourth, is mainly a platinum-group producer and is left out here.

AngloGold’s output fell from 768,000 ounces. It kept full-year guidance of 2.8–3.17 million ounces, declared a $361mn dividend and had net cash of $1.26bn. Harmony’s fall in output came from a planned gap in high-grade ore at its Moab Khotsong mine.

For comparison, Barrick reported an AISC of $1,911 against a realised price of $4,243 (see Barrick’s big split). Even Harmony, the highest-cost of these three, kept more than $1,500 an ounce between the gold price and its sustaining cost by our arithmetic.

Why costs rise when gold rises

AngloGold said market-driven factors accounted for 61% of the rise in its cash costs. That is not unusual. Several costs move with the gold price itself: royalties are often a percentage of revenue, and profit-linked pay and taxes rise with it. When a local currency strengthens against the dollar, costs paid in that currency grow when measured in dollars. Fuel and other inputs add their own inflation. The result is that a part of every gain in the gold price is passed on as cost. Not every gold miner is winning looked at the same pressure at a smaller producer.

Gold Fields: Tarkwa and Northern Star

Gold Fields said there is “significant uncertainty” over the leases for its Tarkwa mine in Ghana, which expire in April 2027. That is jurisdictional risk: a mine is only as valuable as the right to operate it. The company also reported that Northern Star’s board declined to engage on its takeover proposal, and that Quebec has authorised construction at its Windfall project. It has bought back $854mn of shares.

Bullion or miners?

Miners give leverage to the gold price, because a fixed cost base means margins grow faster than the price. That leverage works in reverse when costs rise or prices fall, and miners add risks that bullion does not have: leases, strikes, grades and governments. These quarters show both sides: record received prices, and costs rising almost as fast in percentage terms. This site does not give advice or forecast prices. The current gold price is on the gold price page.

Every figure here is as reported by the publications listed under Sources, at the time they reported it. Prices move; the live gold price has the current one. Nothing on this page is investment advice.