Newmont's Boddington cost up 20%

A projected one quarter delay for the start up of the Boddington gold project has blown out Newmont Mining Ltd's share of the capital cost of the operation to up to $A2.8 billion.

In its September quarterly results out today, the gold miner attributed the delay on the tightening labour market and continued industry-wide commodity cost inflation.

In July, the company flagged a possible extension for the development of the project and said it would result in increased costs.

In today's quarterly, the company now expects to pay between $US1.7 billion and $US1.9 billion ($A2.8 billion), up from July's estimate of between $US1.4 billion and $US1.6 billion.

The initial forecast for the mine was pegged at between $US900 million and $1.1 billion.

The project is a joint venture between Newmont, which holds 66.7 per cent, and AngloGold Ashanti Ltd.

Newmont said it expects the Boddington to start up in early to mid-2009.

"Despite continued cost pressures, the Company remains confident in the plant design and 12 month ramp-up schedule," Newmont said.

"The Company continues to view Boddington as a cornerstone asset within its portfolio."

The project has gold reserves of 11.1 million ounces and copper reserves of 1 billion pounds, and has an expected mine life of in excess of 20 years.

The project is expected to generate some $770 million a year for the Western Australian economy.