BlackRock World Mining Trust plc (LON:BRWM) has announced its latest portfolio update.
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
All information is at 31 January 2022 and unaudited.
Performance at month end with net income reinvested
| One | Three | One | Three | Five | |
| Month | Months | Year | Years | Years | |
| Net asset value | 0.7% | 8.1% | 22.4% | 75.4% | 86.0% |
| Share price | 7.0% | 12.8% | 23.8% | 109.8% | 114.9% |
| MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)* | 0.0% | 4.4% | 18.1% | 51.3% | 53.6% |
* (Total return)
Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream
At month end
| Net asset value (including income)1: | 627.32p |
| Net asset value (capital only): | 599.02p |
| 1 Includes net revenue of 28.30p | |
| Share price: | 630.00p |
| Premium to NAV2: | 0.4% |
| Total assets: | £1,292.3m |
| Net yield3: | 3.8% |
| Net gearing: | 11.1% |
| 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, and 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 ended 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 | 71.2 | Diversified | 40.9 | |
| Latin America | 8.0 | Copper | 20.9 | |
| Australasia | 5.3 | Gold | 15.1 | |
| United States | 3.6 | Steel | 6.9 | |
| Other Africa | 3.2 | Industrial Minerals | 4.0 | |
| Canada | 2.8 | Iron Ore | 3.4 | |
| South Africa | 2.0 | Platinum Group Metals | 3.2 | |
| Indonesia | 1.4 | Aluminium | 3.1 | |
| Russia | 1.0 | Nickel | 1.4 | |
| United Kingdom | 0.6 | Zinc | 0.2 | |
| Net Current Assets | 0.9 | Net Current Assets | 0.9 | |
| —– | —– | |||
| 100.0 | 100.0 | |||
| ===== | ===== |
| Ten largest investments | |
| Company | Total Assets % |
| Vale: | |
| Equity | 5.6 |
| Debenture | 3.4 |
| BHP | 8.0 |
| Anglo American | 7.8 |
| Glencore | 7.6 |
| Freeport-McMoRan | 5.4 |
| ArcelorMittal | 4.7 |
| Rio Tinto | 4.3 |
| Teck Resources | 3.8 |
| First Quantum Minerals | |
| Equity | 2.8 |
| Bond | 0.9 |
| Newmont Mining | 3.4 |
| Asset Analysis | Total Assets (%) |
| Equity | 91.7 |
| Bonds | 3.7 |
| Preferred Stock | 3.5 |
| Warrants | 0.2 |
| Net Current Assets | 0.9 |
| —– | |
| 100.0 | |
| ===== |
Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:
Performance
The Company’s NAV returned +0.7% in January, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which was flat (Performance figures in GBP).
The mining sector held up better than broader equity markets in January, which recorded their worst month since March 2020 and worst start to a year since 2016 (for reference, the MSCI ACWI TR Index fell by 4.9% over the month). Hawkish commentary from the US Federal Reserve increased investor expectations around interest rates and the US 10-year treasury yields rose from 1.52% to 1.78% (the highest level since the start of the COVID-19 pandemic) and this contributed to value significantly outperforming growth over the month. Encouragingly, economic activity in China showed continued signs of improvement, with December steel production data (released in January) up by 24.4% month-on-month. This contributed to the iron ore (62% fe.) price rising by 20.8% despite the physical market remaining relatively weak. Performance across the other mined commodities was mixed with aluminium, nickel and palladium prices rising by 8.7%, 9.4% and 23.9% respectively, but copper and gold prices were down by 1.7% and 1.4% respectively.
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
