Newmont CEO Stepping Down, Replaced by Current COO

By: Alice Young
Alice Young
Alice joined the Invezz team after motherhood convinced her to make a career change from actuary-ing. She brings a… read more.
on Dec 4, 2012

On December 3, the largest US gold producer Newmont Mining (NYSE:NEM) announced that it appointed its current president and chief operating officer Gary Goldberg to succeed Richard O’Brien as chief executive officer from March 1. The CEO transition makes Newmont the third major gold producer to replace its top manager this year, with the industry struggling to contain costs rising quicker than gold prices.

**Richard O’Brien Steps Down as Newmont CEO**
In a press release, the Colorado-based Newmont Mining said that the current chief executive officer, Richard O’Brien, was going to step down as CEO and retire from the company’s Board of Directors by March 1, 2013. Bloomberg quotes Omar Jabara, a Newmont spokesman, as saying that the management change “is a reflection of succession planning, more than anything else,” adding that it was something the company had been preparing for a long time.

The management change comes at a time when Newmont is struggling with rising costs and falling output. As reported by Reuters, Newmont’s gold sales are down approximately 15 percent since 2006, whereas the company’s third quarter income attributable to shareholders declined by as much as 26 percent on account of rising costs and falling output at mines in Australia, Ghana and Indonesia.

“The issue of rising costs and mine development delays is industry wide,” noted Elizabeth Collins, a mining analyst at Morningstar (NASDAQ:MORN), as quoted by Reuters. “The new CEO will be facing the same issues. It is getting increasingly hard for the largest gold companies to grow production without suffering from extremely high costs.”
**Gary Goldberg Appointed as New CEO**

The new CEO, Gary Goldberg, joined Newmont in December 2011 as COO and executive vice-president from Rio Tinto (LON:RIO) where he was CEO of the company’s industrial minerals unit from 2006 to2011. In July 2012, Mr Goldberg was promoted to COO and president of Newmont. Bloomberg quotes George Topping, an analyst at Stifel Nicolaus & Co, as saying that Mr Goldberg’s appointment appears to have been planned for some time. “It looks to me as if Gary Goldberg has been groomed for this position,” commented Mr Topping.

!m[The US Gold Producer The Third Major Miner To Announce Top Management Change](/uploads/story/957/thumbs/pic1_inline.png)Mr Topping also noted that the new CEO would need to address operational issues at the company’s existing mines, as well as to look for other assets to stabilise production. “They have no growth and over the last five years production has actually fallen,” pointed out Mr Topping as quoted by Reuters, adding that stabilising output would have to involve the acquisition of smaller mining companies.
**Management Changes Trend**
Newmont is yet another major gold miner to replace its CEO in 2012, with Bloomberg reporting that in June 2012, the world’s biggest gold producer Barrick Gold Corp (TSE:ABX, NYSE:ABX) said that it was “disappointed” by its share price performance and fired Aaron Regent as CEO, replacing him with CFO Jamie Sokalsky. Reuters in turn reports that in August, Tye Burt lost his job as CEO of Kinross Gold Corp (TSE:K, NYSE:KGC). The platinum sector also made its “contribution” to top management changes at major mining companies with Anglo American’s (LON:AAL) CEO Cynthia Carroll resigning from her post in October.

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