BlackRock Executive Calls Gold Miners’ Share Buy-Backs ‘Reckless’
Evy Hambro, global head of thematic and sector investing at BlackRock, criticized gold mining companies for their share buy-back programmes during remarks at the FT Mining Summit, saying the practice amounted to "reckless capital allocation." His comments, reported by MiningMX, come as several of the world's largest gold producers have ramped up share repurchases over roughly the past year and a half.
Hambro said gold companies have been approving buy-backs "without any real process," comparing the lack of rigor to how firms typically evaluate major capital projects. "If you look at what companies do when they're making $1bn investment decisions on building new mines, they do far more work on that than they do on $1bn decisions to buy back their own shares," he said.
Four major gold miners, Barrick Mining, Newmont, AngloGold Ashanti and Gold Fields, have recently approved buy-back programmes together totaling about $12 billion. BlackRock holds significant positions in several of these companies, including a 12% stake in Newmont, 10% in AngloGold Ashanti and 6% in Gold Fields.
Hambro's core concern centered on timing and transparency. He said he was troubled by companies announcing large buy-back plans when share prices were near their peak, only to pull back when gold prices fell. As an example, he pointed to a scenario in which gold drops to $4,000 an ounce and shares become 40% cheaper, with companies having already stopped buying at that point. "Where was the maths in making those decisions in the first place?" he asked.
He said miners should prioritize flexibility to act opportunistically in the market rather than locking themselves into commitments they may later regret, and he argued there isn't enough transparency around the reinvestment frameworks that would help build investor confidence in these buy-back plans.
Despite his criticism of buy-back strategy, Hambro remains positive on gold's longer-term trajectory. Gold has already gained 112% over the past three years, according to the article, and Hambro expects further strength ahead. He attributed this outlook to growing government debt levels and persistent fiscal deficits around the world, with no clear plans from governments to address the underlying problems. "That means you're going to see an ongoing depreciation in the purchasing power of paper currencies," he said, adding that real assets, including gold, stand to benefit as a result.
He acknowledged that in the shorter term, gold prices could remain volatile due to interest rate changes, geopolitical tensions and shifts in central bank buying patterns. Still, he characterized the long-term direction as favorable, saying "the trend is very much your friend."
Who this affects
This story is most relevant to investors who hold shares in major gold mining companies, particularly those with exposure to Barrick Mining, Newmont, AngloGold Ashanti or Gold Fields. It may also interest people who hold gold-focused funds or exchange-traded products, since BlackRock's commentary touches on both individual company decisions and broader expectations for gold prices. Those who follow mining sector news or who are considering any investment tied to gold or mining equities may want to pay attention to how companies communicate their capital allocation decisions going forward.
As a personal finance writer who focuses on translating money, insurance and benefits news into plain language for everyday households, I think stories like this are a reminder that even large, well-resourced investors can openly disagree with how companies manage their cash. That kind of disagreement is worth noting, not because it tells anyone what to do with their own money, but because it shows how differently informed market participants can read the same set of facts.
Nothing in Hambro's remarks amounts to a prediction with guaranteed results, and gold prices, like any asset, can move in either direction based on factors well beyond any single company's buy-back policy. Readers who hold gold-related investments, or who are weighing whether to do so, may find it useful to discuss their specific circumstances with a licensed financial professional who can account for their individual goals and risk tolerance.
Source: MiningMX
Before this, we covered: Gold Could Get a Boost if the Treasury Revalues Its Bullion Holdings, UBP Analyst Says
