The world’s largest gold mining company, Newmont warned that inflationary pressures would continue into 2023 after its second-quarters profits missed estimates. Newmont raised its annual forecast as shares of the company dropped 12 percent, Reuters reported.

Higher operating costs related to labor, energy and supplies have forced the miner to hike its annual forecast for all-in sustaining costs (AISC), an industry metric that reflects total expenses, to $1,150/oz from $1,050/oz earlier.

In comparison, the cost in the second quarter ended June 30 rose nearly 16 percent to $1,199/oz of gold.

Reuters reported that the miner sees about a 20-30 percent spike in prices for raw materials such as cyanide and explosives, used in mining operations, in the second half of the year and a tight labor market to persist into 2023.

This would drive an additional 7 percent of cost escalation this year, on top of the 5 percent outlined in December, Chief executive Tom Palmer said on a call.

The labor crunch and inflationary pressures have also impacted global mining firms such as BHP Group and Rio Tinto which also signaled similar warnings.

The companies have been hit by a dip in bullion prices that faced their worst quarter since early 2021, falling nearly 7 percent in the three months ended June, as a firm dollar and aggressive rate hikes eroded the appeal of the non-yielding asset.

Newmont's shares fell as much as 12.05 percent to $45.20 after the company also lowered its annual production guidance to 6 million oz from 6.2 million oz earlier, citing operational challenges and competitive labor market in Canada and Australia.

Gold production in the second quarter rose about 3.4 percent to 1.5 million oz from a year earlier.