BlackRock World Mining Trust plc (LON:BRWM) has announced its latest portfolio update.
All information is at 31 March 2022 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 | 10.4% | 28.1% | 44.5% | 115.4% | 142.7% |
| Share price | 6.3% | 31.4% | 38.4% | 144.5% | 184.1% |
| MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)* | 8.6% | 22.0% | 31.7% | 77.6% | 94.6% |
(Total return)
Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream
At month end
| Net asset value (including income)1: | 769.58p |
| Net asset value (capital only): | 754.99p |
| 1 Includes net revenue of 14.59p | |
| Share price: | 745.00p |
| Discount to NAV2: | 3.2% |
| Total assets: | £1,587.3m |
| Net yield3: | 5.7% |
| Net gearing: | 12.1% |
| Ordinary shares in issue: | 184,806,116 |
| Ordinary shares held in Treasury: | 8,205,726 |
| Ongoing charges4: | 0.9% |
2 Discount to NAV including income.
3 Based on a first interim dividend of 4.50p per share declared on 29 April 2021, a second and third interim dividend of 5.50p per share declared on 19 August 2021 and 18 November 2021 respectively, and a final dividend of 27.00p per share declared on 8 March 2022, all 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 2021.
| Country Analysis | Total Assets (%) |
| Global | 73.1 |
| Latin America | 7.1 |
| Australasia | 6.4 |
| United States | 4.9 |
| Canada | 3.6 |
| Other Africa | 2.8 |
| South Africa | 1.3 |
| Indonesia | 1.1 |
| United Kingdom | 0.2 |
| Net Current Liabilities | -0.5 |
| | —– |
| | 100 |
| | ===== |
| Sector Analysis | Total Assets (%) |
| Diversified | 42.3 |
| Copper | 20.9 |
| Gold | 15 |
| Steel | 7.2 |
| Industrial Minerals | 4.6 |
| Aluminium | 3.7 |
| Iron Ore | 3 |
| Platinum Group Metals | 2.5 |
| Nickel | 1.1 |
| Zinc | 0.2 |
| Net Current Liabilities | -0.5 |
| | —– |
| | 100 |
| | ===== |
| Company | Total Assets (%) |
| Vale: | |
| Equity | 6.1 |
| Debenture | 3.3 |
| Glencore | 8.7 |
| BHP | 8.3 |
| Anglo American | 7.3 |
| Freeport-McMoRan | 5.1 |
| Teck Resources | 4.1 |
| Rio Tinto | 4.1 |
| First Quantum Minerals: | |
| Equity | 3.3 |
| Bond | 0.7 |
| Newmont Mining | 3.6 |
| ArcelorMittal | 3.1 |
| Asset Analysis | Total Assets (%) |
| Equity | 94.5 |
| Preferred Stock | 3.1 |
| Bonds | 2.8 |
| Warrants | 0.1 |
| Net Current Liabilities | -0.5 |
| | —– |
| | 100 |
| | ===== |
Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:
Performance
The Company’s NAV returned +10.4% in March, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which returned +8.6% (performance figures in GBP).
The Russia-Ukraine crisis dominated the headlines in March and led to increased concerns around inflation and global economic growth. Mined commodity prices rose almost across the board on supply uncertainty. This was most apparent in the commodities for which Russia has historically been a significant exporter, such as nickel and palladium, with the nickel price for example rising by 30.1% during the month.
Continued increases in global energy costs also put upward pressure on some of the more energy-intensive mined commodities, such as steel, aluminium and zinc. Within the precious metals space, the gold price rose by 2.0% over the month as the metal saw ‘safe-haven’ demand, with notable investor inflows into physically backed gold ETFs.
Elsewhere, economic data from China remained relatively weak as the country grappled with rising COVID-19 cases, with lockdowns in place in a number of key regions. If this weakness persists into the second half of 2022, we would expect the Chinese government to step in with positive stimulus to support the economy.
Strategy and Outlook
Supply and demand in mined commodity markets is generally very tight today and prices look well-supported in our view. On the demand side, increased global infrastructure spending is supporting demand, whilst we expect the mining sector to play a critical role in the coming years in supplying materials required for lower-carbon technologies, like wind turbines, solar panels and electric vehicles. The Russia-Ukraine crisis puts greater focus on energy independence, particularly for Europe, and will further accelerate investment into renewable energy capacity build-out in our view. On the supply side, 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.
Mining companies are generally in robust financial shape today with strong balance sheets and high levels of free cash flow being generated. Finally, we view mining equities as an effective way to hedge portfolios against persistent inflationary pressures whilst, despite recent outperformance, valuations continue to look attractive in our view.
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
