Noke Kiroyan named Newmont subsidiary CEO

Newmont, the world biggest gold producer, has new CEO for its Indonesian operations. Last week, the US-based mining firm had appointed Noke Kiroyan, a former president director of Rio Tinto Indonesia, as president director of PT Newmont Pacific Nusantara (NPN).

NPN, a wholly-owned Newmont subsidiary that is providing services for all Newmont’s interests in Indonesia. It provides government relations, taxation and other services to secure Newmont’s US$2.5 billion investment in the country.

The 59-year-old was born in Manado, North Sulawesi where Newmont operates the gold mining company PT Newmont Minahasa Raya (NMR). The Newmont subsidiary and its executive have gone on trial there, charged with dumping toxic waste and polluting a bay (Buyat Bay) near its mine.

Prosecutors said Newmont mine tailings 'reduce the quality of seawater at Buyat Bay and water in Buyat River' and that police laboratory tests found excessive levels of mercury and arsenic in the bay.

The pollution had 'caused itchiness among Buyat villagers and caused Buyat hamlet to be unlivable, forcing residents to relocate'. Newmont has denied the charges, saying it disposed of toxins safely and that levels of mercury and arsenic found around the mine were well within acceptable levels. But studies have produced conflicting results. Newmont faces a $173 million civil case over the alleged pollution.

The gold mine near Buyat Bay, 2,200 kilometers northeast of Jakarta, opened in 1996 and closed in August 2004 due to depleted reserves. Newmont's operations in Indonesia accounted for 6 per cent of its global sales in 2004. The company also operates Asia's second-largest copper mine, Batu Hijau, on eastern Sumbawa island, which produced 718 million pounds of copper and 719,000 ounces of gold last year. It has a mine life of 20 years.

In an announcement last Friday, Newmont said Noke is a capable of managing companies in dealing with workers right, divestment, environmental and management transition disputes. So, it is clear that Noke is expected to turnaround Newmont’s image and wining the court battle.

Apart of the trial on NMR, Newmont’s operation in Sumbawa through PT Newmont Nusa Tenggara (NNT) also worrisome due to increasing workers group pressure. Newmont might be impressed with the way Noke handle the massive workers protest at PT Kaltim Prima Koal, the largest coal mining company in Indonesia, in 2003, even though he was at odd with labor movement groups. Noke was criticized with his style of curbing labor protest. But he has his own views on labor issue in the country.

“What is an issue is Government regulation, which, among others things, includes a requirement that people dismissed for whatever reason needs to be given compensation. This thinking is not right, he says, explaining that, under existing law, a worker has to be compensated even if he or she is convicted of a crime or dismissed because of negligence. We think this law is detrimental to business,” he said in an interview last year.

For sure, his native North Sulawesi was not the only reason for Newmont to appoint Noke. He has more than three decades’ experience as an international business executive. After a distinguished career with Siemens in Indonesia, he managed Salim Group oleochemical companies in Germany, Australia and the US before becoming President Director of Rio Tinto Indonesia in 1997.

In 2001 he was assigned as President Director of Kaltim Prima Coal (KPC), and following its sale in October 2003 rejoined Rio Tinto Indonesia as non-executive Chairman. KPC was jointly-owned by Rio Tinto and Beyond Petroleum. KPC was sold to PT Bumi Resources Tbk., a listed company controlled by Bakrie Group owned by Aburizal Bakrie who is Indonesia’s chief economic minister.

Graduating with a degree in journalism in the early 1970s from Padjajaran University, Bandung, West Java, Noke climbed the corporate ladder, eventually to become the CEO of numerous multinational firms. Prior to the appointment at Newmont, Noke holds the position of non-executive chairman of Rio Tinto in Indonesia, president commissioner of PT Kelian Equatorial Mining, independent commissioner at PT Asuransi Cigna and the president of the Indonesia-Australia Business Council (IABC).

Noke also earned a Bachelor of Arts degree in Liberal Studies from the College of Arts & Sciences at Syracuse University, New York and a Postgraduate Diploma in Business Administration from the Edinburgh Business School, Heriot-Watt University in Scotland. He speaks English and German fluently and has a good working knowledge of Dutch.

With such rich experiences and close relationship with government officials, it is interesting to see whether Noke could help Newmont out of its troubles.

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