BlackRock World Mining Trust plc (LON:BRWM) has announced its latest portfolio update.
All information is at 31 October 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 | Three | One | Three | Five | |
| Month | Months | Year | Years | Years | |
| Net asset value | 5.6% | -7.6% | 35.8% | 68.4% | 94.5% |
| Share price | 7.6% | -7.4% | 46.7% | 95.0% | 122.1% |
| MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)* | 2.2% | -9.1% | 28.7% | 49.4% | 66.4% |
* (Total return)
Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream
At month end
| Net asset value (including income)1: | 585.78p |
| Net asset value (capital only): | 555.86p |
| 1 Includes net revenue of 29.92p | |
| Share price: | 564.00p |
| Discount to NAV2: | 3.7% |
| Total assets: | £1,213.4m |
| Net yield3: | 4.0% |
| Net gearing: | 10.6% |
| 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 quarterly interim dividend of 4.00p per share declared on 12 November 2020 and a final dividend of 8.30p per share announced on 5 March 2021 in respect of the year ended 31 December 2020, and a first interim dividend of 4.50p per share declared on 29 April 2021 and a second interim dividend of 5.50p per share declared on 19 August 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 | 68.0 | Diversified | 37.7 | |
| Latin America | 7.1 | Copper | 21.3 | |
| Australasia | 6.3 | Gold | 16.4 | |
| United States | 5.5 | Steel | 9.0 | |
| Other Africa | 3.1 | Platinum Group Metals | 3.9 | |
| South Africa | 2.5 | Iron Ore | 3.0 | |
| Canada | 2.2 | Aluminium | 2.8 | |
| Russia | 1.3 | Industrial Minerals | 2.4 | |
| Indonesia | 1.3 | Nickel | 1.3 | |
| United Kingdom | 0.8 | Zinc | 0.2 | |
| Net Current Assets | 1.9 | Silver & Diamonds | 0.1 | |
| —– | Net Current Assets | 1.9 | ||
| 100.0 | —– | |||
| ===== | 100.0 | |||
| ===== |
| Ten largest investments | |
| Company | Total Assets % |
| Vale: | |
| Equity | 4.9 |
| Debenture | 3.6 |
| Glencore | 7.8 |
| Anglo American | 7.1 |
| BHP | 7.0 |
| Freeport-McMoRan | 5.7 |
| ArcelorMittal | 5.2 |
| Rio Tinto | 4.0 |
| Ivanhoe | 3.3 |
| Teck Resources | 3.2 |
| Newmont Mining | 3.1 |
| Asset Analysis | Total Assets (%) |
| Equity | 89.9 |
| Preferred Stock | 4.2 |
| Bonds | 3.9 |
| Warrants | 0.2 |
| Options | -0.1 |
| Net Current Assets | 1.9 |
| —– | |
| 100.0 | |
| ===== |
Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:
Performance
The Company’s NAV returned +5.6% in October, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which returned +2.2% (Figures in GBP).
Global equity markets performed well over the month, with the MSCI ACWI TR Index rising by 5.0%. Global economic data showed signs of improvement, with China, Eurozone and US manufacturing PMIs at 50.6, 58.3 and 58.4 respectively. Meanwhile, global power shortages continued to dominate the headlines and impact markets. Thermal coal supply shortages in China saw prices remain at record highs. China also curbed production of energy intensive commodities, aluminium and steel, due to higher energy prices and as part of its efforts to combat emissions and pollution. Iron ore, a key input in steel production, came under further pressure as a result, with 62% fe. prices falling by 4.6%. Elsewhere, platinum group metals (PGMs) prices rose over the month on signs of greater semiconductor chip availability, improving the outlook for automobile supply (PGMs are used in the catalytic converters for petrol and diesel cars).
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 an 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
