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    Iran war squeeze on acid and aluminium: margin impacts for mine planners

    May 28, 2026|

    Reviewed by Tom Sullivan

    Iran war squeeze on acid and aluminium: margin impacts for mine planners

    First reported on MINING.com

    30 Second Briefing

    Iran’s war around the Strait of Hormuz has disrupted more than half of seaborne sulphur trade, shut in about 11 million barrels per day of crude and put 3–3.5 million tonnes of Middle East aluminium output at risk, driving sulphuric acid prices up 245% year-on-year and Europe’s duty-paid aluminium premium to a record $621/t. Indonesian HPAL nickel plants, which import roughly 75% of their sulphur from the Middle East, have already cut battery-feed output by at least 10%, while DRC leach operators face acid at $1,000–$1,400/t versus sub-$500 norms. Integrated sites with captive smelters, such as Ivanhoe’s Kamoa-Kakula producing 1,350 t/d of acid and selling Q1 volumes at $467/t then $725/t for June, are weathering the squeeze and in some cases monetising surplus, as European and US buyers also bid up Canadian aluminium to backfill lost Gulf supply.

    Technical Brief

    • Some Indonesian HPAL plants reportedly held only 1–2 months of sulphur inventory before curtailments.
    • DRC copperbelt imported about 1.3–1.4 Mt of sulphur last year, mostly via Middle East routes.
    • Shanghai Metals Market reports DRC sulphuric acid at $1,000–$1,400/t, versus sub-$500/t typical levels.
    • Ivanhoe’s Kamoa-Kakula smelter sold 107,700 t of sulphuric acid in Q1 at an average $467/t.
    • Kamoa-Kakula’s current acid output of ~1,350 t/d equates to about 60% of smelter design capacity.
    • Europe sourced ~1.3 Mt, or 21%, of its primary/alloyed aluminium imports from the Middle East in 2025.
    • Quebec’s aluminium export share to the US fell from 95% to 78% QoQ, with Europe rising to 18%.
    • Aluminerie Alouette redirected output sharply, lifting European sales from 4% to 57% of production in one quarter.
    • Alcoa diverted about 100,000 t of Canadian aluminium away from the US to alternative markets, mainly Europe.

    Our Take

    Wood Mackenzie has also been flagging energy‑linked cost pressure elsewhere in our coverage, with BMO using its data to show that Brent above $100/bbl can lift copper cash costs by ~16%, so the current sulphur and sulphuric acid squeeze on Congo copperbelt and Indonesian HPAL operations compounds an already tight margin environment for copper producers.

    The exposure of Indonesian nickel ‘battery‑feed’ output to sulphuric acid supply, alongside Indonesia’s role in producing more than half of the world’s nickel, dovetails with Wood Mackenzie’s lithium and broader battery‑metals work, where it projects structural deficits and heavy capex needs; disruptions here likely sharpen OEMs’ interest in geographically diversified critical‑minerals offtake such as the US Smackover Lithium deal covered in March 2026.

    Middle East aluminium’s 9% share of global smelting capacity and Europe’s 21% import dependence from the region echo Wood Mackenzie’s separate analysis of Venezuela’s stranded aluminium chain: both suggest that policymakers and traders in Europe and North America may revisit high‑capex restart or greenfield options in politically aligned jurisdictions as a hedge against Gulf‑related supply risk.

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    Prepared by collating external sources, AI-assisted tools, and Geomechanics.io’s proprietary mining database, then reviewed for technical accuracy & edited by our geotechnical team.

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