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Battery metals mining faces diesel disruption

Battery metals mining faces diesel disruption

London, 24 March (Argus) — The Middle East energy and fuel crisis could place immediate pressure on battery metals mining, particularly where operations rely heavily on diesel for haulage, transport and on-site activity. But the effects would not be uniform across the supply chain. While upstream mining is most directly exposed to fuel availability and price shocks, logistics could affect the entire supply chain if primary production goes off line. Some mining operations in southern Africa, Australia and southeast Asia may be affected by diesel shortages and price increases, early assessments suggest. At least four refineries in the Mideast Gulf have some units closed, even as a precaution, following missile or drone attacks. But those that remain on line are mostly finding it impossible to export their products through the strait of Hormuz. The Mideast Gulf exported 53mn t of diesel and related gasoil products in 2025, according to Vortexa ship tracking, representing around 13pc of global shipments. Only two tankers carrying non-Iranian clean oil products have navigated the strait of Hormuz in the past couple of days . Ports in South Africa and Tanzania had around two months' worth of diesel in stock that is now moving towards the interior of Africa, a source at a copper/cobalt mining company in the Democratic Republic of the Congo (DRC) told Argus on 12 March. Some mining operations may be forced to reduce fuel consumption by mid-April if the strait of Hormuz does not open soon. Two other logistics companies in Zambia warned of fuel shortages — truckers will be in "limbo" from the first week in April, a source said. Zambia is a key route between the copperbelt and some of the ports on the east coast of South Africa, including Durban, which handles large volumes of copper and cobalt. Most copper/cobalt belt producers use diesel for logistics, open pit haulage and in some cases to power dense media separation machines that concentrate ore, and various other mine site activities. Around 80pc of the DRC's power comes from hydro-electricity, according to the IEA, although diesel generators are used in areas with limited connectivity and as a back-up. Much of this diesel comes through the eastern ports of Dar Es Salaam, Durban and Beira, which have so far experienced limited direct disruption to operations as a result of the US-Iran war. But if shipping continues to be disrupted in the Middle East, these key ports could become extremely crowded as vessels seek alternative stopping points for Asia-Europe-Africa trade. "They could be refuelling destinations or trans-shipping routes if the Red Sea closes," a trader said. Australia's acute exposure The Australian government has already lowered fuel standards in preparation for supply chain issues and there have been localised shortages at gas stations, mainly because of short-term panic-buying. But Australia is exposed to shortages as it sources most of its diesel from Asia, which gets it from the Middle East. Six fuel shipments to Australia were cancelled last week and government ministers warned that supply in the second half of April is uncertain. Australia's oil reserves were at 49 days last week, the IEA said, the lowest among member states. Hard-rock lithium mining in Australia is likely to face fuel pressures, particularly at the mine and concentrator level. Chinese market participants have already expressed concern to Argus over spodumene supply from April. Some of the largest lithium operations in the world, such as Greenbushes, Pilgangoora and Mt Marion, rely heavily on diesel for haulage, drilling and remote-site logistics, while electricity is primarily used for crushing, grinding and concentration. This makes upstream spodumene production one of the most directly exposed parts of the battery supply chain to a sustained fuel shock. While most large operators have fuel procurement strategies in place, sustained disruption to global diesel supply or sharp price increases could raise marginal production costs and put pressure on higher-cost producers. Indonesia nickel partially insulated Indonesia's nickel processing sector has a different exposure to the crisis, with greater threats to fertilisers like sulphur and sulphuric acid . High-pressure acid leach and nickel pig iron operations depend heavily on electricity, but much of this power is supplied by captive coal-fired plants located near the sites, rather than imported gas. This may provide some insulation from immediate gas supply disruptions. But the sector is not immune. Diesel is still required for mining and internal logistics, while broader energy market disruption could affect input costs and shipping. By Thomas Kavanagh Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.