Xstrata says it will cost $US290 million more than previously expected to develop a copper and gold mine at Frieda River in Papua New Guinea.
The Swiss mining company said a Highlands Pacific, its local partner on the project, now expects the total investments to be $US5.6 billion, compared with a previous estimate two years ago of $US5.3 billion.
AAP reports Xstrata owns almost 82% of the project.
Last June, Xstrata hinted it might consider selling its participation in the project, as it re-evaluated its global activities.
The Frieda River mine is expected to produce 204,000 tonnes of copper and 305,000 ounces of gold over a 20-year mine life, according to Xstrata, which began managing the project in 2007.