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 2024 and unaudited.
| Performance at month end with net income reinvested | |||||
| One | Three | One | Three | Five | |
| Month | Months | Year | Years | Years | |
| Net asset value | -7.3% | 1.1% | -21.0% | 24.1% | 77.9% |
| Share price | -7.5% | 1.6% | -23.3% | 20.9% | 104.9% |
| MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)* | -6.4% | 4.2% | -12.8% | 26.1% | 61.7% |
| * (Total return)Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream | |||||
At month end
| Net asset value (including income)1: | 561.99p |
| Net asset value (capital only): | 546.21p |
| Share price: | 543.00p |
| Discount to NAV2: | 3.4% |
| Total assets: | £1,224.4m |
| Net yield3: | 7.4% |
| Net gearing: | 12.8% |
| Ordinary shares in issue: | 191,183,036 |
| Ordinary shares held in Treasury: | 1,828,806 |
| Ongoing charges4: | 0.95% |
| Ongoing charges5: | 0.84% |
1 Includes net revenue of 15.78p
2 Discount to NAV including income.
3 Based on a final dividend of 23.50p per share declared on 2 March 2023 in respect of the year ended 31 December 2022, a first interim dividend of 5.50p per share declared on 18 April, a second interim dividend of 5.50p per share declared on 24 August and a third interim dividend of 5.50p per share declared on 11 October 2023 in respect of the year ended 31 December 2023.
4 The Company’s ongoing charges are calculated as a percentage of average daily net assets and using the management fee and all other operating expenses, excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain other non-recurring items for the year ended 31 December 2022.
5 The Company’s ongoing charges are calculated as a percentage of average daily gross assets and using the management fee and all other operating expenses, excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain other non-recurring items for the year ended 31 December 2022.
| Country Analysis | Total Assets (%) |
| Global | 64.8 |
| Canada | 8.1 |
| United States | 7.6 |
| Latin America | 7.6 |
| Australasia | 6.8 |
| Other Africa | 3.4 |
| Indonesia | 0.5 |
| South Africa | 0.2 |
| Net Current Assets | 1.0 |
| —– | |
| 100.0 | |
| ===== |
| Sector Analysis | Total Assets (%) |
| Diversified | 37.7 |
| Copper | 22.6 |
| Gold | 13.4 |
| Steel | 8.8 |
| Industrial Minerals | 4.4 |
| Aluminium | 3.1 |
| Iron Ore | 2.8 |
| Uranium | 2.7 |
| Platinum Group Metals | 1.6 |
| Nickel | 0.9 |
| Mining Services | 0.9 |
| Zinc | 0.1 |
| Net Current Assets | 1.0 |
| —– | |
| 100.0 | |
| ===== |
| Ten largest investments | |
| Company | Total Assets % |
| BHP: | |
| Equity | 8.3 |
| Royalty | 1.5 |
| Vale: | |
| Equity | 5.8 |
| Debenture | 2.9 |
| Rio Tinto | 7.7 |
| Glencore | 7.4 |
| Freeport-McMoRan | 5.0 |
| Nucor Corp | 3.3 |
| Wheaton Precious Metals | 3.0 |
| Barrick Gold | 2.9 |
| Anglo American | 2.8 |
| Cameco Corp | 2.7 |
| Asset Analysis | Total Assets (%) |
| Equity | 96.2 |
| Bonds | 2.3 |
| Convertible Bonds | 0.6 |
| Option | -0.1 |
| Net Current Assets | 1.0 |
| —– | |
| 100.0 | |
| ===== |
Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:
Performance
The Company’s NAV fell by 7.3% in January, underperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which declined by 6.4% (performance figures in GBP).
It was a difficult start to the year for the mining sector on the back of price declines for most mined commodities. Mined commodity prices softened as sentiment around China deteriorated amidst weakness in the country’s domestic property and equity markets. China’s manufacturing PMI remained below 50 but rose marginally month-on-month from 49.0 to 49.2. For reference, prices for iron ore (62% fe), zinc and nickel fell by 6.7%, 4.6% and 2.2% respectively. Iron ore was negatively impacted by China closing a number of steel mills at the end of December as part of its emissions reduction efforts, which restricted steel production through January.
Meanwhile, US dollar strength weighed on the precious metals, with prices for gold, silver and platinum falling by 0.8%, 4.7% and 8.2% respectively. Copper bucked the trend, its price rising by 0.4%, appearing to reflect growing recognition of the supply side issues in that market. Uranium prices also remained strong on robust demand, but the battery materials prices continued to decline on concerns around electric vehicle-related spend.
Strategy and Outlook
China has re-opened but with less impact than had been expected. Uncertainty persists around China’s commodity demand, but we are seeing the Chinese administration announce financial support incrementally.
Longer term, we are excited by the structural demand growth for a range of mined commodities that will result from the low carbon transition. Meanwhile, commodity supply is likely to be constrained by the capital discipline of recent years, whilst inventories for many mined commodities are at historic lows. Mining companies have low levels of debt, continue to return capital to shareholders but appear to be entering a higher capital expenditure phase.
We are seeing Brown to Green emerge as a key theme, where mining companies are focusing on reducing the greenhouse gas emissions intensity associated with their production. We expect to see a re-rating for the mining companies able to best navigate this and are playing this in the portfolio.
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
