The scale of BlackRock’s resources arm means the brutal retreat in mining stocks over recent years has been particularly painful.
But for Evy Hambro, whose role as the head of BlackRock’s resources unit makes him one of the mining world’s most influential voices, one piece of upside from the carnage has been a return among mining executives to the core principles and philosophies that drove the industry before boomtime exuberance crept in.
Speaking to The Weekend Australian, Mr Hambro relates a recent conversation with the chief executive of one of the world’s big mining companies.
During the boom, the executive said, the share register was invaded by “tourists” who only wanted to focus on growth, growth and growth. That singular focus over time began to creep into the company’s culture.
As a result, the company strayed from its principles, invested a lot of money in acquisitions and capex, and has been struggling with debt and regretting the move ever since.
“The industry has definitely got the message that shareholders want a better quality business throughout the cycle,” Mr Hambro said.
That shift in attitudes is some consolation, but doesn’t change the fact that BlackRock and other large mining investors have taken big hits in the past three years.
BlackRock’s $US3.5bn World Mining Fund, headed by Mr Hambro, is down almost 37 per cent this year and 62 per cent over the past three years, with the falls worse than the Bloomberg World Mining Index over the same time frames.
For the rest of this article, click here: http://www.theaustralian.com.au/business/mining-energy/mining-losing-growth-obsession-blackrocks-evy-hambro/story-e6frg9df-1227544363972