NEW YORK - The new Boddington mine in Australia is expected to produce less gold this year than expected as the start-up has been slowed by wet weather and slower performance by contractors, Newmont Mining Corp said on Thursday.

President and CEO Richard O'Brien told Wall Street analysts that Newmont now expects equity gold sales of between 200 000 oz and 300 000 oz in 2009 from the mine in Western Australia. Equity sales are the portion the company owns from joint ventures.

The company previously estimated equity sales of 375 000 to 450 000 oz of gold in 2009 from Boddington, the largest gold mine in Australia, which is expected to produce one million ounces per year when it is at full capacity next year.

"As Boddington ramps up toward commercial production, it will become a significant contributor to our portfolio," O'Brien said.

First production at Boddington is expected in August and there will be a 12-month ramp-up to full production.

On a conference call to discuss Newmont's financial results, O'Brien said the start-up phase is proceeding, despite being adversely affected by wet weather and "a recent decline in contracted workforce productivity associated with the industry-wide economic slowdown."

The economic slowdown has left contractors with fewer new jobs to move onto once Boddington is completed.

Newmont has scaled back its estimate of total equity gold sales in Australia and New Zealand this year to between 1,4-million and 1,5-million ounces from the previous outlook of between 1,5-million and 1,6-million ounces.

Denver, Colorado-based Newmont, the world's No. 2 gold producer, posted lower-than-expected second-quarter profit as weaker copper prices and higher taxes outweighed higher sales volumes and lower costs.

Newmont, which operates mines in Indonesia, Australia, Ghana and North and South America, estimated 2009 equity sales - the portion it owns of joint operations - at between 5,2-million and 5,4-million ounces of gold. It previously saw a range of 5,2-million to 5,5-million.

Second-quarter net earnings fell to $171-million, or 35c a share, from $270-million, or 60c a share, a year earlier, the Denver-based company said.

Excluding items, earnings of 43c a share lagged the average analysts forecast of 47c, according to Reuters Estimates.

Revenue rose 7% to $1,6-billion as Newmont's equity gold sales were 1,2-million ounces - roughly the same as in second quarter 2008. The average realized price was $915/oz, with costs down 4% to $423/oz.

"The 2009 decrease (in net income) is primarily due to lower realized copper prices and a significantly higher tax rate, partially offset by higher sales volumes and lower operating costs," Newmont said in a statement.

Newmont only produces copper at its Batu Hijau mine in Indonesia. Equity copper sales there doubled to 47-million pounds in the quarter, with an average realized price of $2,17 per pound. Costs dropped to 58c per pound from $2,02 a year earlier.

But although the London Metals Exchange copper price rose about 22% to $2,27 per pound during the quarter, it is still down sharply from year-earlier levels of about $3,83.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.