May 19, 2020 / 2:21 PM / 6 days ago

Miner Newmont expects higher costs, lowers 2020 capex on COVID-19 impact

FILE PHOTO: Visitors speak with a representative at the Newmont Corp booth at the Prospectors and Developers Association of Canada (PDAC) annual conference in Toronto, Ontario, Canada March 1, 2020. REUTERS/Chris Helgren

(Reuters) - Newmont Corp said on Tuesday it expects costs to rise in 2020 as some of its operations were placed in temporary care and maintenance, and the miner also cut its spending budget due to COVID-19-led reduction in non-essential activities.

The company now expects 2020 consolidated gold all-in sustaining costs to be $1,015 per ounce compared with its earlier expectations of $975 per ounce.

Newmont expects total 2020 capital expenditure at about $1.3 billion.

The mining industry has been bracing for a prolonged drop in commodity prices and has been worried that the COVID-19 outbreak could fuel a rare simultaneous drop in both supply and demand for metals.

Newmont said the revised 2020 outlook includes production and cost impacts, as five of its operations were halted for an average 45 days each.

The company had withdrawn its 2020 outlook in March, citing some production could be deferred to 2021 due to the ongoing coronavirus outbreak.

The miner reiterated it 2020 output estimates of about 6 million ounces of attributable gold production.

Reporting by Arundhati Sarkar in Bengaluru; Editing by Vinay Dwivedi

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