BlackRock's head of natural resources, Evy Hambro, has criticized the recent surge in share buybacks by major gold mining companies, calling the trend "reckless" and "undisciplined." Speaking at the Financial Times Mining Summit, Hambro expressed disappointment over the lack of strategic planning behind these buybacks, which have totaled around $12 billion across four of the largest miners: Barrick Mining (B), Newmont (NEM), AngloGold Ashanti (AU), and Gold Fields (GFI). BlackRock holds significant stakes in each of these companies.
Hambro contrasted the thorough decision-making process behind billion-dollar investments in new mines with the seemingly impulsive nature of share buybacks. He argued that mining companies would be better served by investing in new production to boost future supply, especially given his bullish outlook on gold prices. Despite near-term volatility driven by shifting monetary policies and interest rates, Hambro believes gold will benefit from the ongoing depreciation of paper currencies due to government debts and deficits.
Gold futures saw a slight increase on Friday, with the front-month Comex October contracts for gold (XAUUSD) and silver (XAGUSD) rising 0.3% to $1,959.50/oz and $26.995/oz, respectively. However, for the full week, gold slipped 0.7% and silver slumped 6%. Hambro's comments highlight a broader debate within the industry about the best use of capital in a rising gold price environment.