London-listed Atalaya Mining has cautioned that geopolitical tensions in the Middle East could push mining costs higher in 2026, even as the company maintains its production and cost guidance.

CEO Alberto Lavandeira said in a conference call that Atalaya, which operates in Spain, expects inflation to remain broadly contained, but flagged energy markets as a key risk factor amid ongoing conflict in the region.

“Normally, inflation is well under control in the past year, but this war in the Middle East could drive up costs, so something that we will be monitoring closely.”

Lavandeira said Atalaya’s primary exposure would come through energy prices, particularly fuel, although the company’s operations in Spain were partly shielded from volatility.

“Obviously, the effect of this war, one should look at the effect on energy. In that sense, our energy cost is electricity, which is an important part of our cost, is quite stable because we have, first, our solar plant, and second, we have our long-term PPA [power purchase agreement], which covers a good portion of our costs.”

He added that Spain’s strong renewable energy base, including wind, solar and hydro generation, further limited exposure to gas price swings.

“We are not very exposed to the markets of gas… but we do have something that we’ll be watching carefully, which is the diesel price. Diesel price has an influence in the mining rates and obviously, this can translate it.”

Despite the geopolitical uncertainty, Atalaya is maintaining its 2026 cost guidance of $2.60/lb to $2.90/lb in C1 costs and $3.10/lb to $3.40/lb in all-in sustaining costs.

The company expects first-quarter production to be slightly lower than planned owing to the processing of lower-grade material, but expects grades improving through the rest of the year. Full-year copper production guidance remains unchanged at 50 000 t to 54 000 t, alongside about one-million ounces of silver.

The cost outlook follows a strong 2025 performance, during which Atalaya benefited from stable input costs, higher production and favourable by-product credits from silver, helping to keep all-in sustaining costs at $2.90/lb for the year.

Lavandeira noted that while cost pressures across the mining industry are rising, with many peers approaching $3.50/lb AISC levels, Atalaya continues to compare favourably.