Mining firms undertaking opencast operations are taking the biggest knocks during the current wave of fuel price hikes, the Chamber of Mines of Zimbabwe (CoMZ) said this week.
The surge, which has been felt worldwide, has been triggered by tensions in the Middle East — a critical source of oil for the world.
In an interview with the Zimbabwe Independent, CoMZ chief executive officer Isaac Kwesu said Zimbabwe’s mines — heavily reliant on fuel due to power shortages — were paying the price of electricity outages by running on generators.
“The global phenomenal fuel price increases have had adverse ripple effects on the cost of production in the mining industry,” Kwesu said. “The impact is relatively significant in those mines that apply open cast method, and use diesel as a major source of power.
“Highly mechanised operations, mines that use diesel generators as back-up to grid have been equally affected.”
Mining is one of Zimbabwe’s biggest sources of foreign currency, and trends in the sector often determine the direction of the broader economy.
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Output has held steady, officials said.
But a more fragile picture is emerging beneath the surface — marked by rising operational strain.
The Zimbabwe Energy Regulatory Authority has raised fuel prices several times since the Middle East tensions started.
At the start of March, diesel climbed to about US$1,77 per litre from US$1,52, while petrol rose to roughly US$1,71 from US$1,56.
Two weeks later, authorities implemented a sharper increase, pushing diesel to US$2,11 per litre and petrol to around US$2,23 per litre.
Zimbabwe imports all its refined fuel, leaving domestic prices highly exposed to global shocks.
For mining companies, the impact is immediate. Fuel is one of the largest operating costs and offers little room for substitution in the short term.
“As anticipated, and in the short run, we have not received a report of any scale down of mining operations attributed to the increase in the price of fuel,” Kwesu said.
Mining generates more than 70% of Zimbabwe’s export earnings, forcing companies to sustain output even as profitability narrows.
Instead, firms are adjusting internally — tightening procurement systems, optimising haulage routes and reducing idle machinery time. Some larger operators are exploring hybrid energy solutions, combining diesel with solar and battery storage to limit long-term exposure.
But such investments require capital, which remains scarce. Years of economic instability and limited access to international finance have left many miners, particularly smaller players, unable to fund energy transitions.
The broader implications are significant. Sustained cost pressures threaten competitiveness, especially in commodities with tighter margins.
While gold producers may find some relief in firmer prices, others — including platinum group metals and nickel — face weaker or more volatile markets, leaving little cushion against rising fuel costs.
Lithium, despite strong long-term demand, has also experienced price swings, heightening the need for cost discipline.
At the core of the challenge is Zimbabwe’s unresolved energy deficit. Frequent power outages have made diesel generation a necessity, locking miners into a high-cost model exposed to global oil price swings.
Efforts to expand domestic generation have yet to deliver reliable relief. Analysts say until grid power improves, the sector will remain structurally vulnerable.
Across Southern Africa, mining firms are grappling with similar pressures as the Middle East crisis ripples through global energy markets.
In South Africa, producers have warned that rising diesel costs, compounded by already high electricity tariffs, are significantly inflating operating expenses, particularly for open pit and bulk commodity operations that depend heavily on haulage.
Major miners in the region have begun recalibrating strategies in response. Some are accelerating investments in renewable energy projects, including solar plants and battery storage, to reduce reliance on diesel and unstable grid supplies.
Others are scaling back non-essential capital expenditure, prioritising high-margin operations and tightening cost controls to preserve cash.
In Zambia and Namibia, where mining also plays a central economic role, operators have flagged similar concerns, pointing to fuel-driven increases in transport and production costs that are eroding competitiveness in export markets.
Industry analysts say the crisis is reinforcing a long-standing structural shift, where energy security is becoming as critical as ore quality in determining viability.
Firms that fail to secure stable and affordable energy sources risk being priced out, especially in a global environment where commodity prices remain volatile.
While the immediate shock is linked to geopolitical tensions in the Middle East, the longer-term impact could reshape investment decisions across the region, pushing mining companies toward cleaner, more predictable energy models.