It is not a risk mitigant if you haven't hedged your costs. Particularly diesel/fuel oil which IS able to be hedged at least for the short term.
Gold price hedging is a risk mitigant for gold price, not for costs. Financiers consider it a risk mitigant because they most commonly insist on partial hedging the reserve, particularly in financing new operations. I am not aware of a financing contract that has ever included proportional fixed costs. However, if fixing costs is the standard for risk mitigation you will be interested in the market announcement "Regis Diesel Hedging": https://hotcopper.com.au/posts/17499262/single
They described the hedging of 4million litres of diesel as a "strategic medium term risk management". I have actually never seen a similar announcement from any other company but perhaps others have done so?
RRL Price at posting:
$1.93 Sentiment: None Disclosure: Not Held
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