Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

BlackRock’s Hambro Sees Gold Supply Declining With Mines Closing

Jan. 10 (Bloomberg) -- BlackRock Inc.’s Evy Hambro, manager of its $8 billion World Mining Fund, said gold supply may fall “quite rapidly” as producers curb output at expensive mines.

“Very few gold companies are actually making significant profit,” Hambro said in an interview on Bloomberg TV’s “On the Move” with Manus Cranny. “If this trend of better management of these assets continues, supply will start to decline quite rapidly.”

Producers are cutting costs and focusing on profitable mines after prices for the metal slid 28 percent last year, the biggest annual drop since 1981. Barrick Gold Corp., the largest by sales, sold three of its Australian mines last year and Chief Executive Officer Jamie Sokalsky says it’s in talks to offload more assets. Harmony Gold Mining Co. said it would lower expenses, partly by reducing equipment and exploration spending.

The industry must follow the example of diversified mining companies in cutting costs and allocating spending, Hambro said.

“The gold companies, and the management teams there, were the worst offenders in terms of value destruction,” he said. “They ticked every single box on what not to do. The lessons they could learn from the industrial players are quite real.”

The 30-member Philadelphia Stock Exchange Gold and Silver Index fell 49 percent last year as the U.S. economy improved and some investors lost faith in the metal as a store of value.

To contact the reporter on this story: Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.