BlackRock World Mining Trust plc (LON:BRWM) has announced its latest portfolio update.
All information is at 30 November 2021 and unaudited.
For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm
Performance at month end with net income reinvested
| One Month | Three Months | One Year | Three Years | Five Years | |
| Net asset value | 0.5% | -3.2% | 26.0% | 77.1% | 95.1% |
| Share price | -4.4% | -4.7% | 22.7% | 91.8% | 112.7% |
| MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)* | -0.1% | -6.7% | 20.4% | 54.1% | 64.9% |
* (Total return)
Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream
At month end
| Net asset value (including income)1: | 583.52p |
| Net asset value (capital only): | 558.08p |
| 1 Includes net revenue of 25.44p | |
| Share price: | 534.00p |
| Discount to NAV2: | 8.5% |
| Total assets: | £1,213.5m |
| Net yield3: | 4.5% |
| Net gearing: | 10.7% |
| Ordinary shares in issue: | 183,681,116 |
| Ordinary shares held in Treasury: | 9,330,726 |
| Ongoing charges4: | 0.9% |
2 Discount to NAV including income.
3 Based on a final dividend of 8.30p per share announced on 5 March 2021 in respect of the year ended 31 December 2020, a first interim dividend of 4.50p per share declared on 29 April 2021 and second and third interim dividends of 5.50p per share declared on 19 August 2021 and 18 November 2021 in respect of the year ending 31 December 2021.
4 Calculated as a percentage of average net assets and using expenses, excluding finance costs, for the year ended 31 December 2020.
| Country Analysis | Total Assets (%) | Sector Analysis | Total Assets (%) | |
| Global | 67.8 | Diversified | 38.0 | |
| Latin America | 8.1 | Copper | 21.3 | |
| Australasia | 6.1 | Gold | 16.9 | |
| United States | 4.4 | Steel | 7.0 | |
| Other Africa | 3.1 | Industrial Minerals | 3.5 | |
| Canada | 2.2 | Platinum Group Metals | 3.4 | |
| South Africa | 2.1 | Iron Ore | 2.8 | |
| Indonesia | 1.7 | Aluminium | 2.8 | |
| Russia | 1.3 | Nickel | 1.7 | |
| United Kingdom | 0.9 | Zinc | 0.2 | |
| Net Current Assets | 2.3 | Silver & Diamonds | 0.1 | |
| Net Current Assets | 2.3 | |||
| —– | ||||
| 100.0 | —– | |||
| ===== | 100.0 | |||
| ===== |
Ten Largest Investments
| Company | Total Assets % |
| Vale: | |
| Equity | 4.9 |
| Debenture | 3.4 |
| Glencore | 7.6 |
| BHP | 7.5 |
| Anglo American | 7.1 |
| Freeport-McMoRan | 5.8 |
| ArcelorMittal | 4.2 |
| Rio Tinto | 4.1 |
| Teck Resources | 3.5 |
| Newmont Mining | 3.2 |
| Oz Minerals | |
| Equity | 1.2 |
| Debenture | 1.9 |
| Asset Analysis | Total Assets (%) |
| Equity | 90.1 |
| Bonds | 4.0 |
| Preferred Stock | 3.4 |
| Warrants | 0.2 |
| Net Current Assets | 2.3 |
| —– | |
| 100.0 | |
| ===== | |
Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:
Performance
The Company’s NAV returned +0.5% in November, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which fell by 0.1% (Figures in GBP).
Global equity markets came under pressure in November after the emergence of a new COVID-19 variant, Omicron, feared to be more transmissible and more resistant to vaccines than previous strains. Federal Reserve Chairman, Jerome Powell, added to investor fears when he indicated the committee would be discussing potentially accelerating its tapering program at the upcoming December meeting. In terms of key macro data for the mining sector, China’s year-on-year industrial production growth was relatively soft at 3.5%, whilst the country’s steel production continued to decline. Bulk commodity prices were weak, with the iron ore (62% fe.) price falling a further 6.6% over the month, ending at $106/tonne. Meanwhile, energy market shortages eased, causing thermal coal prices to decline along with some of the more energy-intensive commodities, such as aluminium. Elsewhere in the base metal space, the copper price was down by 3.0% but the physical market remained very tight, with copper for immediate delivery trading at a significant premium.
Strategy and Outlook
We believe the outlook for mined commodity prices remains robust, whilst mining shares offer attractive value. Recovering global economic growth, accommodative monetary policy, rising government spending and increased focused on green capital investment all point towards strong demand. Meanwhile, supply is constrained following years of capital discipline from the producers, and we are seeing no signs that this is set to change.
We are encouraged by what we are hearing from management teams in terms of maintaining their focus on capital discipline. Longer-term, ill-discipline remains a risk but, regardless, increases in capital expenditure would take some time to feed through into new supply given the time-lags associated with mining projects. We are also seeing inflationary data increase and commodities have traditionally been a core way for investors to both protect themselves from this but also benefit from such trends.
We believe the best risk-adjusted opportunity today is in the shares of mining companies in robust financial positions with strong balance sheets and high levels of free cash flow. Mining companies are continuing to return capital to shareholders through dividends and buybacks.
All data points are in USD terms unless stated otherwise.
For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm
